(Adds comment, details of reorganization)
By Helen Murphy
BOGOTA Nov 16 (Reuters) - Colombian regulators on Friday ordered the reorganization of Interbolsa SA after its brokerage, the largest in the Andean nation, collapsed earlier this month and dented confidence in the country's capital markets.
The move is the latest in a series of measures by the government to shore up investor sentiment following the failure of Interbolsa brokerage, which found itself without enough cash to pay its debts.
The Superintendent of Societies, which monitors Colombian companies, said that if the reorganization is not successful, the company would be liquidated. It set a time limit of six months to figure out its assets and financial obligations to try to reach agreement with creditors.
"The reason we have initiated this process is precisely to protect its assets," said Luis Guillermo Velez, who heads the regulator. "That way debts can be paid in an ordered way."
While concerned the debacle could spread to other financial entities, investors have so far taken a wait-and-see approach and haven't punished markets too much. The government has said the brokerage's cash problems are due to poor management and not an indication of wider liquidity problems in Latin America's fourth biggest economy.
Interbolsa SA, also parent company of Grupo Interbolsa and all its financial units, has been impacted by the liquidation of the broking arm, the regulator said in a later statement.
"This is all very ominous for Interbolsa ... a week ago the government was saying it was a separate entity to the brokerage - it appears now the authorities aren't so convinced by that argument," said Rupert Stebbings, managing director of Celfin Capital in Medellin.
The measure, essentially an embargo of its assets, extends to the five countries in which Interbolsa SA operates - Colombia, Panama, the United States, the British Virgin Islands and Luxemburg - but not to the companies in Grupo Interbolsa, said Velez.
The measure does not impact trading of Interbolsa SA's shares on the stock index, Velez said. It also allows the company to continue operating so that it can generate resources to pay its obligations.
Trouble spread to the parent company after Interbolsa brokerage was intervened and liquidated earlier this month following a liquidity problem that left it unable to make $11 million in scheduled bank payments.
A criminal investigation by the Attorney General's office is also underway to establish whether there was possible conflicts of interest, share price manipulation and "hiding" of information by the brokerage.
The Inspector General's Office said on Thursday it would gather evidence to see whether government bodies or ministries failed to properly monitor the brokerage. An inquiry is the first step in a possible formal investigation. (Reporting by Helen Murphy, Nelson Bocanegra and Jack Kimball; Editing by Bernard Orr)