(Adds comment, details of reorganization)
By Helen Murphy
BOGOTA Nov 16 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
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,
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)