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Chilean president's son resigns amid questions about family business

Saturday, February 14th 2015 - 06:41 UTC
Full article 14 comments
“I decided to step aside and resign my position as socio-cultural director of the presidency,” Sebastian Davalos told reporters at La Moneda palace “I decided to step aside and resign my position as socio-cultural director of the presidency,” Sebastian Davalos told reporters at La Moneda palace
Chilean financial regulators found no irregularities in connection with a $10.4 million bank loan to Davalos' wife, Natalia Compagnon, for a real estate venture Chilean financial regulators found no irregularities in connection with a $10.4 million bank loan to Davalos' wife, Natalia Compagnon, for a real estate venture

Chilean President Michelle Bachelet's son resigned Friday from an unpaid post in her administration amid questions about his wife's business affairs.

 “I decided to step aside and resign my position as socio-cultural director of the presidency,” Sebastian Davalos told reporters at La Moneda palace. “I want to emphasize that I have committed no crime or offense, as some media outlets have suggested,” he said, declining to take questions.

Chilean financial regulators found no irregularities in connection with a $10.4 million bank loan to Davalos' wife, Natalia Compagnon, for a real estate venture, Pulso newspaper reported earlier Friday.

The Office of the Superintendent of Banks and Financial Institutions, known by the initials SBIF, reviewed every detail of the transaction between Banco de Chile and Compagnon's firm, Caval Limitada, Pulso said, citing comments from chief regulator Eric Parrado.

Banco de Chile, the Andean nation's No. 2 bank in terms of assets, is jointly owned by Chilean conglomerate Quiñenco and U.S.-based Citigroup.

“SBIF has not found legal or regulatory violations that could pose a risk to depositors and the bank's solvency,” Parrado said.

The loan to Compagnon raised concerns about possible influence-peddling and the use of privileged information, as Caval Limitada had assets of only 6 million pesos (less than $10,000) and the stated purpose of the loan was to acquire rural land that was supposed to be re-zoned for urban use. The zoning change never took place.

Critics pointed to a meeting between Davalos with Banco de Chile Vice President Andronico Luksic before the loan was approved.

The loan was executed in December 2013, one day after Bachelet, who had previously governed from 2006-2010, won a second term as president.

Davalos released a financial disclosure statement this week.

Bachelet's government has distanced itself from the issue, calling it a matter between private parties and urging Davalos to provide the appropriate explanations.

Opposition politicians had demanded Davalos' resignation and said they will ask prosecutors to open an investigation of the loan to Compagnon's company.

La Tercera newspaper reported Thursday that Caval closed a deal this week to sell the lands acquired with the loan. Caval will net $4 million after repayment of the principal and interest to Banco de Chile, the daily said.

Categories: Politics, Chile.

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  • ManRod

    actually, this is a good example, that there is more than hope for Chile. No law was broken, though the quite high ethic and moral standards demand the stepdown of the son in law of the president of the state. In EVERY other state in this continent, they would have laghed you in the face. It happens and it's not even worth the News...just look at Kirchners son.

    Feb 15th, 2015 - 03:08 pm 0
  • Think

    Shileno Turnip at (1)

    Your level of ignorance is just flabbergasting....
    Sebastian Dávalos is President Bachelet's SON, not her son in law...
    Anyhow, actually this is a good example, that there is more than hope for Chile. No law was broken, though the quite high ethical and moral standards of the Shilean left movement, demand the step down of the SON of the president of the state.
    Quite different from the story about the hundreds of millions of dollars the right wing Ex-President Piñera and his “friends” made from the HidroAysen scandal and other niceties..
    Not to mention the ~ 40.000.000 U$S stolen by our unforgettable Pinochet...

    Feb 15th, 2015 - 06:35 pm 0
  • Condorito

    @Think
    I would trust so much more in the ethical and moral standards of the Chilean left if it hadn't taken best part of a decade and pressure from the right to halt hijito de mami's meteoric non-meritocratic career.

    I agree with ManRod that even the reluctant adherence of our left to their own principles is far preferable to the blatant nepotism that is the norm over the Andes. And as for Patagonian represas/presidential back-handers ... saca primero la viga de tu ojo, y entonces verás con claridad para sacar la mota del ojo de tu hermano, hermano.

    Feb 16th, 2015 - 02:12 pm 0
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