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LATIN AMERICA |
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Venezuela Shuts Down Banks Belonging To
Former Chavez Crony
CARACAS -
The Venezuelan government has shut down four
private banks, accusing them of financial
irregularities. The closures come 10 days
after the authorities took over the banks on
suspicion of violating regulations.
The banks are owned by a group of investors
led by businessman Ricardo Fernandez, who is
under arrest on charges of misappropriating
funds.
Two banks, Provivienda and Canarias, will be
liquidated. The others, Bolivar and
Confederado, may be rescued.
Finance Minister Ali Rodriguez said the
"negative performance" of the banks made it
necessary to stage a "closed-door
intervention".
The assets of Canarias and Provivienda would
be auctioned off, but the problems at
Bolivar and Confederado were less severe, he
added.
The four institutions account for about 6%
of the Venezuelan banking sector.
The four banks are not the first Venezuelan
financial institutions to have been taken
into state hands.
In May, the government nationalised the
country's third-largest lender, Banco de
Venezuela, after agreeing to pay over one
billion US dollars to Spanish owner Banco
Santander.
Since 2006, President Hugo Chavez's
government has also acquired Venezuela's
biggest telecommunications, electricity and
steel companies, as well as major oil
projects and large allegedly idle farms with
the purpose of creating a state-run economy.
However, the latest bank takeovers stem more
from owner Mr Fernandez's deteriorating
relationship with the Chavez administration,
according to analysts.
Until recently, Mr Fernandez was on good
terms with the government. He also owns a
number of food companies that supply
products to the country's state-run Mercal
supermarkets.
But now he and his lawyer, Jose Camacho, are
awaiting trial on charges of
misappropriating deposits and providing
loans to other businesses in which they are
investors.
When the government took over the banks on
20 November, it said they had not properly
explained increases in capital and were in
breach of various other regulations.
Mr Rodriguez said most of the banks' 725,000
account holders would be protected by the
government's deposit guarantee fund.
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