January 23, 2018

Ricardo Nissen, expert in corporate law and former head of the Inspección General de Justicia (IGJ).

Friday, February 17, 2017

‘The Post Office should be immediately declared bankrupt’

Ricardo Nissen, former head of the Inspección General de Justicia takes part in the La Posta TV show.
By Leandro Renou
For the Herald

Ricardo Nissen is one of the most respected specialists in company law and asset concealment. Talking to the Herald, he agrees with his colleagues that “this is not the first time there have been overlapping interests.”

“In the case of (Juan José) Aranguren,” Nissen says, citing the current Energy minister, “he had shares in Shell and moved to the Energy Ministry where he favoured Shell. It is a textbook case of conflict of interests.”

Do you find any difference between those cases and those involving family or friends?

With Mauricio Macri there is a conflict of interest but it’s different. There are many cases in which Macri acts on behalf of (his cousin Ángelo) Calcaterra and Calcaterra carries out public works like the Sarmiento rail underpass. He acts like the owner of the company to whom the work is leased but Macri does not figure directly as Calcaterra’s shareholder.

Aranguren’s case is different. In the Post Office, for example, the Macris do not appear but their companies do and since companies have no legal personality, the owners of the volition of those companies are the Macris. You might say that the conflict of interest is indirect, via the companies, but the legal personalities are fictitious.

How so?

They are screens, even with the best companies in the world with zero irregularities, behind them are human beings who own the volition of those companies. The companies exist to limit liability and to function with other assets, so as not to confuse the assets of the partners with the company. Now when the volition of those persons leads to the company acting illegally, as with the Post Office, people talk about Macri, not about the companies — they do not say Socma or Sideco, they say Macri. And the government recognises it when (Communications Minister Oscar) Aguad says that we are in the presence of an insolvent businessman, referring to Franco Macri.

What should a president with so many private links do, in order for his acts not to come into question when entering public office?

What he should do first of all is to leave all boards of directors. And secondly, since he benefits from the dividends, he should get rid of all shares. That’s what Aranguren did although it has never been established whether in fact he sold his Shell shares — he never showed anything on paper. All with very little transparency where nobody ever finds out anything about anybody.

You also questioned at the time another mechanism for avoiding conflicts of interest — namely, the president’s blind trust ...

The law doesn’t talk about that, it is an unknown category. And Macri’s case was partial because not all his assets were in the blind trusts. Trusts are fake, just like offshore companies.

In the particular case of the Post Office, do you see it as a question of ethics or irregularities?

The Post Office case is absolutely illegal, it violates all the norms of bankruptcy law. Some interpretations of the case are completely ridiculous.

The law is clear about suspending interest. Why is it suspended? Because when you show up and identify yourself as a creditor and thus part of the bankruptcy proceedings, interest is suspended and everything is defined by the nominal value, as calculated up to the date of the declaration of bankruptcy. But that ends when a preventive agreement is proposed, when you have to make an offer which is not abusive. The main point is that 15 years have gone by of messing around shamelessly with the Post Office and justice too, in a case which should have been resolved in far less time. Various proposals were made and the government rejected them all because they were ridiculous.

Then a judge did not sanction an agreement and it was appealed by the Post Office and it was seven years in the appeals court without being resolved. And now that appeals court has sent it to the prosecutor to be resolved.

If there was a proposal in 2002 for a sum owed in 2003, the same thing cannot happen in 2016. And all the appeals court’s jurisprudence from 2000 onwards speaks of abusive proposals and you do not have one ruling, you have 100 rulings.

Now if the bankruptcy had gone through the same year or in two years, this situation would not apply. Although when you apply for bankruptcy, you know you have to settle with your creditors and you know what to do. But when 15 years go by, you can’t say anything because the law suspends the interest and that can last 15 years. It is condemned to the most absolute illegitimacy and the Post Office should be declared bankrupt immediately.

How would the situation change if bankruptcy were requested?

While there is a step prior to bankruptcy (the “cramdown,” a kind of salvage tender to see if anybody wants to buy the share package), it has never worked in Argentina. Under bankruptcy you have to sell all existing assets and share absolutely everything.

The upside of bankruptcy is that it permits you to open up everything and go straight to the shareholders and prove that the company was managed illegitimately. Socma or Sideco stay out and we go straight to the real culprits, to the assets of the Macris.

But for now that is a fiction because bankruptcy has not been requested.



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