Abstract
In support of the previous chapter, selected authors were tasked to research and pick their “top six” scandals in their respective country, focusing on those that have created local crises and—in some territories—have also driven changes in local regulations and corporate practices since the late 1980s—in other not so much. These thumbnail sketches serve to reflect on the themes underlying corporate governing behaviors and help extract the key areas marked for improvement. Given the sensitive nature of such cases, the authors only draw on public sources in preparing their narratives. The chapter provides a summary of the broad and diverse findings of the 36 cases, concluding that corporations in Latin America have some unique features that will merit further assessment. In closing, the co-editors present a six-dimension model that may help in reflecting on the nature and texture of corporate governing in the region.
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Notes
- 1.
Merriam-Webster: A scandal may refer to specific circumstances or actions that offend established social mores (“the congressman’s arrest for bribery caused a scandal”) or can also refer more generally to a state of affairs (“the state of our elections is a scandal”). It can be used to refer to gossip (either true or false), and also has an archaic sense of “a disgraceful usually baseless accusation or imputation”. One common thread with all of the word’s definitions is that they tend to be concerned with meanings that most people would strongly prefer to not be associated with.
- 2.
Bevir, M. (2009). The construction of governance. International Journal of Organization Theory & Behavior.
- 3.
Tricker, R. (2012). The evolution of corporate governance. The SAGE handbook of corporate governance, pp. 39–61.
- 4.
Blockholders is not strictly an academic term, but here is defined as shareholders who own at least 5% of a company's common shares. Consequently, they are influential shareholders who may gravitate in decisionmaking processes through board positions or act as holders of pivotal stakes required to approve or reject a board proposition at a Shareholder Meeting.
- 5.
Miller, B. & Uriegas F. (2019) Anti-Corruption Watch—Latin America’s Biggest Corruption Cases: A Retrospective—From Mexico to Argentina, iconic scandals have reshaped politics. AQ examines their origins—and fallout.
- 6.
Briozzo, A. (2011). Valuación de oferta pública inicial PyME: el caso de DACSA. Presented at the XXXI Financial Management National Conference. See public sources for the document.
- 7.
Duty of loyalty is the principle that directors and officers of a corporation, in making all decisions in their capacities as corporate fiduciaries, must act at all times in the best interests of their company and without personal economic conflict.
- 8.
The mechanism used by Petersen Energía to acquire such 25% of YPF from Repsol in 2008 is also controversial and subject to investigation; this part of the YPF saga is beyond the scope of the present case analysis.
- 9.
In part because these policies are standard requirements by international creditors, such as the IFC.
- 10.
Vicentin had been a regular contributor to political parties.
- 11.
The timing and price at which TGLT acquired Caputo has also been a controversial issue.
- 12.
Bolsa de Comercio de Santiago (BCS).
- 13.
Oferta pública de adquisición.
- 14.
The Southern Cone is a geographic and cultural region composed of the southernmost areas of South America, mostly south of the Tropic of Capricorn. Traditionally, it covers Argentina, Chile, and Uruguay, bounded on the west by the Pacific Ocean and on the east by the Atlantic Ocean.
- 15.
González, F., Prem, M., Urzúa, F. – The Privatizaion Origins of Political Corporations: Evidence from the Pinochet Regime – The Journal of Economic History, Vol. 80, No. 2 (June 2020).
- 16.
Per Investopedia, a repurchase agreement (repo) is a form of short-term borrowing for dealers in government securities. In the case of a repo, a dealer sells government securities to investors, usually on an overnight basis, and buys them back the following day at a slightly higher price. That small difference in price is the implicit overnight interest rate. Repos are typically used to raise short-term capital. They are also a common tool of central bank open market operations - https://www.investopedia.com/terms/r/repurchaseagreement.asp
- 17.
A “liberanza” (promissory notes of debt) is a special loan through which a debtor employee authorizes his/her employer to make direct payroll deductions from the monthly paycheck to fund the corresponding installment of debt repayments (including fees and interest) directly to the 3rd party—a person or an organization—that had originated the loan.
- 18.
TRM (in Spanish Tasa Representativa del Mercado) is the official exchange rate calculated by the Superintendencia Financiera de Colombia. It represents the average market price of 1 dollar into Colombian pesos, and it’s calculated at the end of every business day using all the transactions of that day.
- 19.
EPS—(in Spanish Entidades Promotoras de Salud—public health insurance organizations that are mandatory to provide health care to Colombian residents receiving monthly payroll deductions of 12.5% of gross monthly declared earnings.
- 20.
In most legal systems of the Spanish-speaking world, the “amparo remedy” or “amparo law” is also called “recurso de amparo” or “juicio de amparo” and is a remedy for the protection of constitutional rights, found in certain jurisdictions. The remedy is an effective and inexpensive instrument for the protection of individual rights. The “amparo”, generally granted by a Supreme or Constitutional Court, serves a dual protective purpose: it protects the citizens and their basic guarantees, and protects the Constitution itself, by ensuring that its principles are not violated by statutes or actions of the State that undermine the basic rights enshrined therein. It resembles, in some respects, constitutional remedies such as the “tutela” available in Colombia, the writ of security (“Mandado de Segurança”) in Brazil and the constitutional complaint (Verfassungsbeschwerde) procedure found in Germany.
- 21.
Over the years, there have been several situations where it has been considered that the rights of investment shares have been harmed. We have chosen one of them, which also prompted a resolution of the regulatory body in favor of investor protection.
- 22.
“leniency” in English common law. A figure of compensation through reduced penalties for information, which allows those who present precise, true, and verifiable information to the prosecution regarding an act of collusion - https://alessandri.legal/en/antitrust-update-chile/
- 23.
Institutional Voids include uncertainty and ambiguity in the regulatory frameworks, government bureaucracy, inefficient rule and law enforcement mechanisms, improper factor markets, excessive red tape, and poor property rights protection. See Khanna and colleagues’ references at the end of the chapter.
- 24.
Despite its popularity in academic literature, the concept of institutional voids has been criticized as colonialist and western-centric, anchored around a single, correct and orderly institutional model, assuming a teleological convergence. For a critique, see Bothello, J., Nason, R. S., & Schnyder, G. (2019). However, given the evolutionary perspective of corporate governing taken in this book, it represents a convenient way to capture the common phenomenon of incompleteness of both markets and regulatory rules.
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Callund, J., Jiménez-Seminario, G. (2023). Corporate Scandals in Latin America and Their Impact on the Corporate Governing Environment. In: Callund, J., Jiménez-Seminario, G., Pyper, N. (eds) Corporate Governing in Latin America. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-85780-6_3
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