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Date	01/02/2001
Companies	BANCO SANTANDER CENTRAL HISPANO - BANCO DO ESTADO DE SAO PAULO -
Subject	Banespa has appealed the court ruling on deposits

	Banco do Estado de Sao Paulo (Banespa) has appealed the court decision requiring the transfer of state-owned deposits worth R2.8bn (€1.5bn £1.0bn $1.4bn) to the state-owned bank, Nossa Caixa Nosso Banco. It is still waiting to hear the outcome of the appeal. State funds have traditionally been kept in state owned banks which led to the transfer move. Previous law also supported this approach. The current government has passed legislation changing the ruling and allowing former state-owned banks to keep state deposits. There are many groupings in Brazil still strongly opposed to privatisation and are continuing the fight to the very end. The privatisation of Banespa was the subject of countless legal objections, some of which led to the delay in the privatisation. Although all other foreign bidders dropped out of the auction for Banespa, Banco Santander Central Hispano paid R7.05bn for the bank, over three times the next highest bidder. The price paid has seriously worried investors, who find it hard to see when BSCH might ever make a commercial return on this investment. One news report dubbed Banespa as BSCH's 'Albatross'.
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