| SAO PAULO, June 12
SAO PAULO, June 12 U.S. investment firm Cartica
Management LLC said on Thursday it added Itaú Unibanco Holding
SA as a defendant in its lawsuit to stop the Brazilian bank from
winning control of Chilean bank CorpBanca SA.
Cartica alleged Itaú, CorpBanca and
billionaire Alvaro Saieh, CorpBanca's controlling shareholder,
violated U.S. anti-fraud and disclosure rules.
In a statement, Cartica said Saieh, Itaú and CorpBanca were
"continuing to withhold material information, and failing to
correct material misstatements," even after it sued, claiming
multiple violations of U.S. securities laws.
Control of CorpBanca would not only give Itaú a foothold in
retail banking in Chile, but provide a way to expand in
Colombia, South America's fastest-growing economy last year.
Itaú is contending with slowing economic growth in Brazil, where
it trails state-run lender Banco do Brasil SA.
Cartica's move, a rare instance of investor activism in the
region, aims to upset Latin America's largest banking
combination since 2008. Cartica, which oversees about $2 billion
in assets, owns about 3.2 percent of CorpBanca's common shares.
A spokeswoman for Itaú in São Paulo did not have an
The firm amended terms of its lawsuit, Cartica v. CorpBanca,
Saieh, et al., filed in April, to include Itaú and its Chilean
unit as defendants. The case is pending in the U.S. District
Court in the Southern District of New York.
The decision to add Itaú to the lawsuit was based on the
"most recent material misstatements and omissions made by
Saieh," Cartica said. "It has become clear to Cartica that Itaú
is actively working with Saieh to close the transaction."
In its statement, Cartica alleged Saieh and the other
defendants "made or permitted misleading statements and
omissions that led to the transaction with Itaú on its current
unfair and undervalued terms, without CorpBanca's minority
shareholders having the opportunity to take any steps to protect
Saieh began putting parts of CorpGroup up for sale last year
to raise cash after SMU, his retail holding company that owns
supermarket chain Unimarc, disclosed accounting errors that
forced it to increase its liabilities and breach its debt
covenants. He also controls Chilean daily newspaper La Tercera.
Late last year, Saieh, a Chilean of Palestinian ancestry,
began talks with Itaú on a merger, an outright sale or the
creation of a structure allowing him to remain a relevant
shareholder in CorpBanca, sources had told Reuters.
Saieh would benefit through proceeds from the sale of his
shares in the Colombian unit of CorpBanca, a $950 million loan
from Itaú, backed by CorpBanca shares, call options with no
downside risk, and an opportunity for future Itaú business in
certain Latin American countries, Cartica said.
(Editing by Jeffrey Benkoe)