June 1, 2017 / 8:46 PM / 10 months ago

After Goldman storm, Venezuela congress blasts Nomura bond buy

CARACAS, June 1 (Reuters) - The head of Venezuela’s opposition-led congress on Thursday slammed Japanese investment bank Nomura Securities for buying about $100 million worth of state oil company bonds, accusing it of helping finance President Nicolas Maduro’s “dictatorship.”

Nomura Holdings Inc’s trading arm paid about $30 million for the debt issued by state-run PDVSA, two sources said earlier on Thursday. It was part of the same transaction last week that has landed Goldman Sachs Group Inc in the middle of a political storm.

“Surely, there must be a way for Nomura to seek profit that is not made on the backs of the misery of Venezuelans,” Julio Borges said in a letter to the CEO of Nomura Holdings, Koji Nagai, urging him to reconsider the transaction.

“The National Assembly will conduct a thorough investigation of this dubious transaction and leave no stone unturned to assure that a future democratic government of Venezuela will not have to pay on this immoral debt entered into by an illegitimate authoritarian regime.”

A Nomura spokeswoman in New York declined to comment.

Venezuela’s opposition has campaigned to dissuade Wall Street firms from financing Maduro’s leftist government, which has drawn international condemnation for abuses of power and human rights violations.

Critics have dubbed the papers “hunger bonds,” as the government has slashed food imports in order to meet hefty debt obligations despite an economic crisis and lower oil prices.

Hundreds of thousands of Venezuelans have taken to the streets in the last two months to push for early elections, freedom for jailed activists, and a humanitarian channel to allow scarce food and medicine into the crisis-stricken country.

Some 61 people have been killed in the unrest, which frequently pits rock-throwing hooded youth against National Guard soldiers firing tear gas, spraying water cannons or firing rubber bullets.


Borges said some of the funds from the bond sales would go to military purchases.

“We understand that at least $300 million of the resources obtained by the regime from the fire sale of these PDVSA bonds are destined to purchase weapons and other military equipment, such as radars, from Russia,” the letter read.

Citing Nomura’s code of ethics which states that the group must “reject all contacts with criminal or unethical organizations involved in activities in violation of applicable laws,” Borges said the bank was indeed dealing with criminals.

“Various Venezuelan military leaders have been named as participants in drug trafficking networks in our region,” he wrote.

“Moreover, Venezuela’s Vice President, Tareck El Aissami, has been designated a drug ‘kingpin’ by the United States government for his active involvement in drug trafficking.”

The National Assembly on Tuesday voted to ask the U.S. Congress to investigate the Goldman deal, which it called immoral, opaque, and hypocritical given the socialist government’s anti-Wall Street rhetoric.

Goldman has said its asset-management arm acquired $2.8 billion of the October 2022 bonds issued by PDVSA “on the secondary market from a broker and did not interact with the Venezuelan government.”

Additional reporting by Olivia Oran in New York; Writing by Alexandra Ulmer; Editing by Matthew Lewis

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