Colombia to investigate Interbolsa brokerage over tax evasion

Wed Nov 14, 2012 9:41am EST

BOGOTA, Nov 14 (Reuters) - Colombia will investigate if
brokerage Interbolsa evaded taxes with a capital fund
in Curacao, the finance minister said on Wednesday, in a
deepening scandal involving the Andean country's largest stock
brokerage.
    Colombia is liquidating Interbolsa after the company failed
to make a scheduled payment, forcing the central bank to inject
cash into the economy and the government to repeat that it's a
one-time case and not indicative of wider financial problems. 
    Finance Minister Mauricio Cardenas told local radio that he
had ordered an investigation into operations by Interbolsa and
Curacao-listed investment fund Premium Capital, which has joint
shareholders with the Colombian brokerage.
    The financial market regulator essentially took over
Interbolsa last week after it was unable to make a payment to a
local bank due to a liquidity squeeze tied to repurchase
agreements, or repos.
    Interbolsa, with about 50,000 clients and one-third of daily
operations on the stock market, also ceded control of its local
bond portfolio to Bancolombia SA. 
    Market players have so far reacted with caution over
Interbolsa's woes, agreeing it is probably an isolated case but
also staying alert to any signs of a spillover to other
financial institutions and contagion from perceived risk.  
    In a sign of more trouble to follow, Colombia's regulator
and attorney general's office called a press conference for
later on Wednesday -- experts said they could not rule out
criminal cases against the company's management.
    The investigations could have wider implications as far as
how overseas investors see Colombia and the way its companies to
operate.
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