SANTIAGO Oct 11 Angry minority shareholders in
two of the companies linked to SQM, the Chilean fertilizer group
rocked by a trading scandal, accused the board of a lack of
transparency as they rebelled against attempts to raise capital.
The Chilean securities regulator SVS last month accused
executives including Julio Ponce - SQM's
chairman and late dictator Augusto Pinochet's former
son-in-law - of buying up shares below market prices and then
reselling them at above-market prices through a complex web of
Ponce controls SQM, which has the rights to the biggest
natural iodine and nitrate reserves in the world, located in
Chile's Atacama desert, through a number of holding companies,
including Norte Grande and Oro Blanco.
On Friday at a meeting, shareholders from pension and
investor funds voted against an attempt by Oro Blanco and Norte
Grande to raise $120 million and $92 million respectively.
The measures were still approved, since both companies are
indirectly controlled by Ponce and SQM.
SQM owns a 67 percent stake in Norte Grande, and Norte
Grande holds a 76 percent stake in Oro Blanco, according to
The minority shareholders questioned the motives of the
board for the capital hike, which the company says is needed to
"These operations have caused losses estimated at $500
million, which Mr. Ponce expects minority shareholders to pay
for with the planned capital increases," said Vicente Bertrand
of Moneda Asset Management, referring to the accusations of
"The enormous asymmetry of information between the
controllers and minority shareholders, which has led to
shareholders' being made aware of unknown or partially revealed
transactions only because of the SVS charges, raises questions
over the real reason for the capital hike," he added.
AFP Provida, the powerful Chilean pension fund
administrator, voted against the capital increases, having
previously asked that the meeting be suspended until more was
known about the financial situation of the companies.
"This rejection is based on an absence of certain necessary
background that would allow us to evaluate the need and
suitability of the proposed capital increase," said Andres
Vezpremy, AFP Provida's representative.
Ponce himself was not present at the meeting, but his
brother Luis Eugenio Ponce, vice-chairman at Oro Blanco and
Norte Grande, was there. He declined a request by Reuters for
Aldo Motta, Norte Grande's chief executive and one of
Ponce's co-defendants, sat stony-faced through the shareholder
comments and left quickly at the end of the meeting without
speaking to the media.