Portugal TAP scandal intensifies after CEO sacking 21042023 Mercado

Portugal: TAP scandal intensifies after CEO sacking 21/04/2023 Mercado

The Portuguese government fired TAP’s CEO last month without a legal assessment of the change, the country’s Finance Minister Fernando Medina acknowledged, deepening a scandal surrounding the stateowned airline.

His statements in parliament on Thursday evening (20) contradicted statements by two ministerial colleagues the day before, according to which the government had obtained a legal opinion to support the decision. That increases the chances that the state will lose a possible milliondollar lawsuit from the fired executives.

The growing controversy surrounding TAP, which has already led to government resignations, could derail Lisbon’s preparations to privatize the airline as larger foreign competitors such as Lufthansa and British Airways owner IAG lay the groundwork for potential deals.

CEO Christine OurmièresWidener and President Manuel Beja were fired with cause on March 6 after an audit found that paying €500,000 (R$2.7 million) in compensation to former board member Alexandra Reis was illegal.

After OurmièresWidener described his dismissal as “illegal”, the opposition’s main Social Democrats warned that the state could lose an eventual court battle if the decision did not have an adequate legal basis.

Parliamentary Affairs Minister Ana Catarina Mendes and Cabinet Minister Mariana Viera da Silva said on Wednesday (19) that the government had obtained a legal opinion supporting the decision but had refused to submit it to Parliament to transfer. protection of the public interest”.

Market Gazette

Receive the most important business news in your email; open to nonsubscribers.

But late Thursday, Medina said the reasons for the layoffs were “very clear” due to the unlawfulness of the severance pay, as determined by the Official Treasury Inspectorate, and had not accompanied a legal opinion.

The leader of the farright Chega party, André Ventura, said “the government realized that they lied” and urged Prime Minister Antonio Costa to assess whether Medina was suitable for the job.

In a tweet, Liberal Initiative Party leader Rui Rocha described the situation as a “celebration of inconsistency and utter disrespect for Parliament.”