MercoPress. South Atlantic News Agency
Chavez sacks half of PDVSA board following a 500 million USD fraud
Too many oil leaks in President Hugo Chavez administration Venezuela’s government giant oil corporation sacked half its board of directors Thursday after PDVSA ’s pension fund lost about 500 million US dollars in a Ponzi scheme linked to a Connecticut-based investor.
PDVSA fired the head of finance Eudomario Carruyo, internal director of production Luis Pulido, planning director Fadi Kabboul, head of gas Carlos Vallejo and research director Hercilio Rivas, according to a decree in Venezuela’s Official Gazette, which didn’t elaborate on the changes. Director Ricardo Coronado kept his post.
By removing Carruyo, President Hugo Chavez may seek to deflect criticism from the pension fund scandal that flared after a Securities Exchange Commission probe found Venezuelan- American Francisco Illaramendi used investors’ money to cover losses, said Patrick Esteruelas, senior analyst with the Latin American sovereign team at Moody’s Investor Service.
Carruyo on May 10 sent a report to Venezuela’s National Assembly denying PDVSA board was responsible for the 453 million USD losses. Illaramendi wasn’t employed directly by PDVSA. He worked for the oil producer while outsourcing with another company during 2004, Carruyo said in the report.
PDVSA will cover all pension fund losses, company President and Oil Minister Rafael Ramirez promised last March.
Ramirez was ratified in his post as were Vice presidents Asdrubal Chavez and Eulogio Del Pino, Thursday’s decree said. Finance Minister Jorge Giordiani and Foreign Minister Nicolas Maduro were added to the board as external directors as well as the head of a pro-Chavez union named Will Rangel.
Giordani will bring “additional pressure” on the company to invest more in Chavez’s social programs rather than in the oil sector, Esteruelas said.
“Giordani has been shifting the burden over to PDVSA and has been extremely reluctant to use resources to emit external bond issuances that fund capital flight,” Esteruelas said. “This is something that could become firmly entrenched now that Giordani has a seat on the board.”
Giordani declined to comment during an event in Caracas today.
PDVSA profit and production have been declining as the company increases investment in government social programs and unplanned refinery outages curb exports. Venezuela’s oil sector contracted 1.8% in the first three months of 2011, according to the central bank.
Venezuela’s net crude oil and refined products exports fell 4.5% in April from a year earlier to 2.14 million barrels a day, the oil ministry said on May 23. The country produces about 2.8 million barrels a day, according to the ministry.
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Read all comments'PDVSA profit and production have been declining as the company increases investment in government social programs . . .'
May 27th, 2011 - 08:11 pm 0Seems a bit counter-productive, diverting the state oil company's money away from oil and oil development and into state 'social programmes'.
Amongst this morasse of inadequacy and corruption is a need to keep winning oil. Taking away the funds to do this is blind stupidity.
Is this Chavez the man, and is Venezuela the nation, to be a force for development of the countries of South America?
Indesputably, nothing would be more harmful for the nations of South America.
I agree, CFK should stop having cosy chats with this man.
May 27th, 2011 - 09:34 pm 0“Venezuela’s government giant oil corporation sacked half its board of directors Thursday after PDVSA ’s pension fund lost about 500 million US dollars in a Ponzi scheme linked to a Connecticut-based investor.”
May 28th, 2011 - 01:46 am 0The whole system is rigged, the United States is a ponzi scheme.
Bernie Madoff words, not mine. Doesn't suprise how crooks lost money by crooks in Connecticut, the base of ponzis (include hedge funds)
“Is this Chavez the man, and is Venezuela the nation, to be a force for development of the countries of South America?”
What force? what are you talking about? As usual, nothing. There are leaders in South America who don't care about chavez, but still talk with him. Your acting again as if Venezuela can/will bring down whole South America.
CFK should stop having cosy chats with this man.
CFK has the right with who she wants to do business. If she's following his footsteps in Argentina, the Argentines should take her out if they disagree with her. I totally disagree with both, but CFK is stuck to Chavez. Why? He's the largest bond holder of high risky Argentine bonds. A bond holder can change anytime the rules of the game.
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