Chile market manipulation scandal takes toll on investor confidence
SANTIAGO, Sept 3 (Reuters) - Investor confidence in Chile has been shaken by a market manipulation scandal involving the former son in law of ex-dictator Augusto Pinochet, a business leader said on Wednesday as a union denounced the affair as "shameful."
The case surrounding Julio Ponce, Pinochet's former son in law and chairman of fertilizer giant SQM, "seriously puts at risk financial market transparency and confidence in those involved," said Hermann von Muhlenbrock, the head of industry body Sofofa, in a statement on Wednesday.
Usually considered one of Latin America's least corrupt economies, Chile has been roiled in recent months by the affair involving companies linked to SQM, which owns vast nitrate and lithium resources in the Atacama desert.
On Tuesday Ponce, the chairman of SQM , was fined nearly $70 million by the market regulator, the biggest individual fine out of a total $164 million levied in the market manipulation scandal.
Copper workers' union FTC called the scandal "shameful" and said it could damage the pension funds of Chilean workers.
The pension regulator said it had instructed the country's main pension funds to quantify the impact and detail legal action they would take to recuperate their losses.
The market regulator's probe, which also took in Chile's largest brokerage LarrainVial, accuses those involved of buying shares below market prices and selling them above market prices through a complex web of holding companies known as "cascadas." Continuación...