UPDATE 1-Colombia opens criminal probe into Interbolsa collapse
BOGOTA, Nov 14 (Reuters) - Colombian authorities opened a criminal investigation into the collapse of Interbolsa, the attorney general said on Wednesday, in a deepening scandal involving the Andean nation's largest 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 in Latin America's fourth-biggest economy. Attorney General Eduardo Montealegre cited conflicts of interest, possible share price manipulation and "hiding" information as part of the investigation. "The Attorney General's Office ... will initiate a criminal investigation to determine whether these behaviors, which are possibly administrative offenses, have criminal relevance or not," Montealegre told reporters. The probe may have wider implications as far as how overseas investors see Colombia and the way its companies to operate. The financial market regulator essentially took over Interbolsa two weeks ago 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. Earlier on Wednesday, Finance Minister Mauricio Cardenas told local radio he had ordered an investigation into operations by Interbolsa and Curacao-listed investment fund Premium Capital, which has joint shareholders with the brokerage.
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