Argentina’s central bank blocks bankrupt soy giant from exchange markets

RIO DE JANEIRO, BRAZIL – Argentina’s Central Bank (BCRA) said on Monday it will suspend Argentine soy crusher Vicentin from operating in exchange markets and making payments abroad until it settles its debts.

The BCRA said Vicentin would be allowed to access the international banking system to settle pending exports. It had also instructed Argentine customs not to process new shipments of goods until the once-dominant soy giant complies with existing obligations.

Vicentin was the main exporter of soybean oil and flour in Argentina but started running out of cash last year, leaving farmers and banks holding more than a billion dollars in bad debts.

Its creditors accused the family-owned company of having used credits destined for the purchase of grains to finance other businesses. Vicentin denies any wrongdoing.

The BCRA said it would also notify the judge handling bankrupcy proceedings related to Vicentin of all export sales it made that were seemingly not paid for, amid accusations by creditors that the company diverted funds to third parties.

An official source with knowledge of the issue said Vicentin also owed the central bank $140 million, since under Argentine law export dollars must be turned over to the central bank to be converted into pesos.

“An audit was done and on that basis, this sanction was applied,” the source said.

A group of banks that calls itself the Ad-Hoc Steering Committee of International Creditors of Vicentin – whose members say they are owed a cumulative total of more than $500 million – filed a complaint with the Economic Crimes Prosecutor’s Office in the port city of Rosario to investigate the company for alleged fraud.

In June, Argentine President Alberto Fernandez had said his government would “rescue” Vicentin.

But the following month Fernandez pulled the plug on a planned government takeover, saying the government would not use public resources while the board remained in place.