The reason was the “incorrect transposition of the European directive on the resolution of banking entities,” a communiqué issued by the Association of Private Senior Bondholders Harmed by Novo Banco (AOSPNB) said.

Harmed bondholders claim this incorrect transposition “allowed the Banco de Portugal, invoking public interest, to perpetrate a real extortion to more than 100 Portuguese families in favour of Novo Banco.”

Noting that the amounts invested in the bonds “represent, in most cases, savings of a lifetime,” retail investors had “their trust in the banking system,” Banco de Portugal and government,” undermined.”

The people affected were not only “institutional bondholders,” said the ones represented by the association, “contrary to what Banco de Portugal said in its decision.”

Moreover, this version is corroborated by large investors of the same bonds, who say that “most institutional investors” affected by the retransfer decision “had those bonds on behalf of retail investors through their pension funds,” said a source linked to the case.

Institutional investors said that Banco de Portugal “did not even take any due diligence to determine who actually held the bonds” before the retransfer decision, according to the source.