Portugal: TAP scandal deepens after CEO fired – 21/04/2023 – Market

Portugal’s government fired TAP’s CEO last month without a legal assessment of the change, acknowledged the country’s finance minister, Fernando Medina, deepening a scandal surrounding the state-owned airline.

His statements in Parliament on Thursday night (20) contradicted statements by two minister colleagues the day before that the government had obtained a legal opinion supporting the decision. This increases the chances of the state losing a possible lawsuit by the fired executives worth millions of euros.

The growing controversy around TAP, which has already led to resignations in government, could derail Lisbon’s preparations to privatize the airline, with bigger foreign rivals such as Lufthansa and British Airways owner IAG laying the groundwork for possible bids.

CEO Christine Ourmières-Widener and President Manuel Beja were fired for cause on March 6 after an audit found that the payment of €500,000 (R$2.7 million) in damages to former board member Alexandra Reis it had been illegal.

After Ourmières-Widener called his dismissal “illegal”, the main opposition Social Democrats warned that unless the decision had adequate legal backing, the state could lose an eventual court dispute.

The Minister of Parliamentary Affairs, Ana Catarina Mendes, and the Minister of the Cabinet, Mariana Viera da Silva, said on Wednesday (19) that the government obtained a legal opinion that supports the decision, but refused to send it to the Parliament to “safeguard the public interest”.

But late on Thursday Medina said the reasons behind the dismissals were “very clear” due to the illegal nature of the severance payment, as established by the official finance inspection, and had no legal opinion attached.

The leader of the far-right Chega party, André Ventura, said “the government has recognized that it lied” and urged Prime Minister Antonio Costa to consider whether Medina was fit for the job.

In a tweet, the leader of the Liberal Initiative party, Rui Rocha, called the situation a “festival of inconsistency and total disrespect for Parliament”.