The Argentine Economy Ministry claimed on Friday New York judge Thomas Griesa has benefited “vulture funds” during negotiations over Argentina's defaulted debt with holdouts and asked the (Argentine) National Values Commission (CNV) to start an investigation over alleged “speculative moves”.
“The judge’s attitude towards the case so far reveals he does not intend to build equal conditions between the parts, but looks to favor vulture funds instead,” a press release by the Economy Ministry reads.
The Ministry asked the CNV to solicit information on Argentine bond exchanges to the US Securities and Exchange Commission (SEC). “We ask to investigate if this trial is not in fact a façade to hide a speculative move,” the press release underlines.
By blocking bondholders from collecting their coupons, it could be a ploy for the vulture funds, directly or through third parties to collect default insurances which they themselves have admitted to be holding.
The International Swaps and Derivatives Association, ISDA, which regulates the private contracts market stated that Argentina was in 'default' in a lightning decision and that decision could trigger the immediate insurance payment of a billion dollars.
Judge Griesa's actions so far reveal that his attitude far from ruling justice and generating balanced conditions between the sides, looks to favor vulture funds, points out Kicillof's ministry release.
And what is most serious is that we are not only confronted with a possible 'inside information' criminal case, which is condemned internationally by all regulators, but we would also be facing a case where one of the parts, with help from the magistrate, generates the facts that later favor it.
How is it possible that the magistrate had delegated on the vulture funds the decision to implement a stay for Argentina, when those very same funds could be making millions if they did not reach a deal? Never before better applied the axiom, 'judge and jury' of the case.
Faced with this possible major millionaire fraud the Ministry of Economy has notified the situation to CNV and requested the immediate launching of an exhaustive investigation.
The investigation must determine whether this case is not in reality a facade for a speculative operation to favor vulture funds, which pretends that they make money on the defaulted bonds they purchased at rock bottom prices, but also with the financial derivates to which they are entitled when ISDA so decides.
Likewise the Argentine ministry questioned Judge Griesa for denying the removal of Special Master Daniel Pollack, who has shown, with the last communiqué, a manifest partiality towards the vulture funds.
The mediator has absolutely exceeded his involvement and his powers on describing as 'default' the impediment imposed by Judge Griesa for some bondholders to collect their monies.
Furthermore it is no merit of Mr. Pollack that the Minister of Economy from Argentina has met with the vulture funds, but rather a signal of good faith from Argentina, in the framework of Pollack's incompetence as mediator to find a solution that not only benefits the vulture funds.
Thus Argentina for these reasons, reiterates its request, by writing, that the mediator be replaced”.
Griesa by preventing some of the swap bondholders from collecting their coupon, pretends to submit Argentina to a true extortion so that it pays the vulture funds what they pretend, even when the Judge is well aware that on doing so means the violation of Argentine law, as well as of the contracts with 92.4% of bondholder that accepted the swap (protected by the RUFO clause).
Finally the release insists that the current debt event in no way is a default event since according to the different provisions established in the prospect, point 4.1 under the heading of 'breach of contract cases', none of them refer to the blocking of collecting monies by a Judge”.