Justice, government and recession put Paolo Rocca in check

While at the international level, the devaluation of the Argentine exchange has allowed him to multiply the profits of Techint group companies, in the local market, Paolo Rocca is going through perhaps one of his worst moments as a contractor and on the personal plan.

According to Forbes magazine, the richest man in Argentina, with an accumulated fortune of 4.7 billion US dollars, has to face simultaneously several conflict fronts. Although the one who removes the most the dream is surely the possibility of being convicted by Judge Claudio Bonadío in the case of the Oscar Centeno notebooks, in which he is charged and prosecuted and continues to be the subject of an investigation for the alleged payment of bribes to old officials of the former Kirchner government.

In this risky judicial scenario, which allows us to imagine a future behind bars for Argentina's most powerful businessman, conflicts with the government stem from changes to Vaca Muerta's rules of the game and the decision to reduce local operations. They take the portfolio company companies hit by the recession, the fall in local consumption and the collapse of industrial activity.

A combo that in the corporate sector is described as "one of the worst" that moved him to meet this man born October 14, 1952 in Milan, Italy, son of Roberto Rocca and current CEO Techint Group. In turn, he heads Tenaris, Ternium and other conglomerate companies that operate in areas such as engineering, construction and the energy sector.

With a market capitalization of around 60,000 million US dollars, the multinational group has nearly 3,000 projects in 45 countries and employs 55,000 people worldwide. During the year, its global profit was more than US $ 18. .000 million. Its shares are listed on the New York Stock Exchange, the New York Stock Exchange and in other foreign markets as well as in the domestic market.

However, such a demonstration of economic power does not seem sufficient to calm the nerves of Paolo Rocca, who took the leadership of Techint in 2002, guiding the conglomerate towards a process of expansion across Latin America and the rest of the world.

In fact, last August, when Techint's stake in this case was known, its holding company lost only $ 14,000 million in market capitalization that it did not at all recovered.

Rocca and Techint also believe that stock market regulators could delve deeper into the already open summaries to investigate the conglomerate's behavior under the ethics protection regime and the compliance standards to be met by the companies contributing to the participation. to these companies. markets

The reasons are not limited to the cause of the notebooks because his group also seems involved in Lava Jato, the most important case of corruption discovered in Brazil. Techint's links with this cause are related to the contracts signed with Odebrecht and the use by Rocca Holding Company of offshore companies to manage allegedly illegal funds used to pay bribes in Brazil and the United States. from other countries in the region. region

On a personal level, both cases cost the employer the mistrust of their peers, as many of the country's businessmen have already begun to distance themselves from those who used their power to corrupt and coordinate over time. last 12 years.

A "moral" conviction initiated by the leaders of IDEA, from which it is clear that not all entrepreneurs are equal and that justice is called upon to apply the ultimate consequences during the investigation into these crimes.

The new routine

In this context, the daily Rocca must closely monitor the future, especially the cause that is under the responsibility of Judge Bonadio and in which he has been involved since the distribution of the books of the driver of Roberto Baratta, the hand right of Julio De Vido in the former Federal Ministry of Planning.

After revealing that Techint had distributed money between former members of the governments of Néstor and Cristina Kirchner to resolve the dispute that one of their companies had known in Venezuela, the Fuscal Carlos Stornelli asked to be continued. And after being instructed by Judge Bonadio, he ended up on the list of businessmen charged by the magistrate.

Rocca is currently being prosecuted for conspiracy, bribes and bribes, as well as the $ 4,000-million forfeiture of his badets. Rocca's hope in this case is to follow the same judicial evolution of Luis Betnazza, Techint's top executive also dealt with by the same case, but to whom House I of the Federal House had dictated the lack of merit in as a member of the illicit badociation the one for Justice Cristina Kirchner commissioned in order to obtain illegal funds. In the case of the employee of Rocca, he is now charged with "active bribery" for the payment of bribes to former officials, a crime punishable by a death penalty. one to three years imprisonment.

In any case, for Rocca, the judicial qualification obtained by Betnazza is also not good news. He complains to his friends and his trusted staff because he considers this decision equates Techint with other companies accused of paying bribes to conclude public works contracts with the national state when his holding , as he repeatedly explained, only participated in 1%. activities generated by public works in Kirchner.

And like Betnazza, acknowledges only that Techint was forced to provide funds for that in 2008, Kirchner's government representatives linked to Venezuelan Chavismo are conducting "negotiations" to resolve a conflict that was affecting the controlled country. Sidor.

The money, according to what Rocca himself said before Bonadio, was used to improve the situation of the 200 employees of this company in Venezuela after the decision of President Hugo Chávez to nationalize the operations.

Depending on the case, it was eight bags representing between $ 800,000 and $ 1 million that Techint staff had handed over to Claudio Uberti, a former OCCOI manager, during this year, as the 39, has proved its investigating judge, Bonadío. .

While he managed to avoid the prison despite the contention of Stornelli's prosecutor to see him behind bars, Rocca shares the list of those who, in the eyes of the magistrate, agreed to pay bribes to members of the previous government to benefit from public works contracts. . The list is also accompanied by Aldo Roggio, Gerardo Ferreyra, Armando Loson and Manuel Santos Uliberarrea, also pursued in the same case but who, unlike Rocca, chose to resign from their positions to avoid further damage to finances and actions. of their respective companies.

They also did so because the government told them that they would only continue to do business with the companies and not with the businessmen involved in the cause of the notebooks. Until the publication of an official resolution last October, which allows, in a general way, companies not to lose their current public works contracts and to continue to be on the list. state suppliers. But as a condition, they must separate the leaders charged in the case of notebooks, the convicts and those who accepted the figure of the collaborator repented or accused.

A before and after Vaca Muerta

Companies involved in these charges are also required to adhere to "integrity" programs, codes of conduct and internal complaints, in order to show a strong signal of transparency. Rocca did not make the same decision, to the point that the board of directors of the holding company endorsed his trust as executor of Techint's commercial policy.

Policies that must now be changed, at least with regard to projects already announced to become the largest producer of unconventional gas from deposits that his oil company Tecpetrol wanted to exploit in the region of Vaca Muerta. The company had committed investments of 2,300 million US dollars to achieve this goal, which it will not be able to accomplish because of the government's decision to change the rules of the game and reduce subsidies for gas production in this southern region of the country.

Beyond the reasons given by the Secretary of Energy, Gustavo Lopetegui, to change the resolution by which this benefit was established and which are linked to the need to respect the zero budget deficit promised to the IMF, the truth is that of Tecpetrol It will be a hard blow.

He made it known publicly through a statement sent to the Buenos Aires Stock Exchange and, privately, through phone calls from his key executives to the closest officials of the president. Mauricio Macri.

In both cases, Techint indicated that the changes to the calculation criteria for the compensation payments and the limits now imposed on the basis of the production volumes initially estimated in August 2017 imply no longer receiving between 2 and 5.6 billion of dollars. These are funds that Tecpetrol should receive in the previous format, corresponding to the criteria for calculating the compensation payments provided for in resolution 46 of 2017.

It happens that the change of payment criteria results retroactively to the liquidations of April, May, June, July, August and September 2018, which are considered illegal in the operation and that is why they have ordered their legal counsel to open a court of law

According to Rocca himself, the measure advocated by Lopetegui has no legal support and therefore allows Techint to think about the possibility of legalizing the problem in the coming weeks. More than anything, send a signal to their international investors that they are defending their funds against what the group views as unsupported scenario changes and endangering future projects and obtaining new ones. fund faced with the uncertainties generated by the decisions of a government that, in Kirchner's best style, also does not meet the standards.

In addition, the Tecpetrol Board of Directors has begun to review the development plans for the already approved area of ​​Fortín de Piedra, in order to readjust the flow of funds for the new scenario and improve its financial indicators. .

Rocca's anger is linked to the funds committed for this region and for which he has already executed $ 1.8 billion in the first 18 months in a 243 km2 area located in Neuquén. Tecpetrol launched the project in March 2017 and in December 2018, it reached a production of 17.5 million m3 / day of natural gas, or more than 12% of the total consumption of the country.

They badure society that this level of production can replace imports of LNG, fuel oil and diesel, with the exchange rate savings and budget savings that this implies for the country and the lowering of the cost of energy. .

In addition, the development of Vaca Muerta gas was one of Rocca's main objectives for the coming years. The entrepreneur is convinced of the potential of the region and will allow Argentina to have abundant energy and competitive conditions, to promote the economic and industrial development of the country and to achieve energy self-sufficiency.

Moreover, until the opening of the debate on the level of subsidies, Vaca Muerta was for Techint the project with which he intended to clean up his compromised image for the cause of Rye's notebooks.

It would be, they thought, a signal for international investors and a national event to congratulate the government, which considers the oilfield as the "jewel" of the direction of Mauricio Macri.

Now they can not rely on this strategy either. Nor can they in the case of other companies in the group affected by the local recession, problems that, if they are aggravated, will have a negative impact on the country's economy.

Is the weight of the outfit huge? In Argentina alone, the group has more than 900 SME customers and suppliers who provide direct work to 22,000 people. In addition, the Techint Group has 21,000 jobs in Argentina. In other words, about 50,000 families depend on their daily lives.

In this context, there is a conflict that Tenaris Siderca is currently suffering in the Campana region of Buenos Aires. Although most staff members are expected to return to their normal duties during this month after a period of "extraordinary repair", there is every indication that vacation workers would stay at home for 90% of their salary. .

Already last December, it transcended the suspension of the workers of the mill, which would repeat itself now and which would affect the operators of several lines of the continuous rolling mill 2 (LACO 2); the completion of rolling mill 1 (LACO 1) and even a delay in starting the steel mill.

Currently, the Campana plant produces about 1.3 million tonnes of steel which is almost entirely converted into seamless steel tubes. And although the company historically exports 75% of the production, it does not seem to be able to trace its problems with a further drop in the price of a barrel of oil, the retention of cash of $ 4 per dollar exported, and withdrawal of withdrawals per year. specific rates.

Another front of conflict with the government is near Campana. Specifically in the province of Buenos Aires de Lima, where he has to build a nuclear reactor under a project called "Carem 25", as part of a tender awarded by the National Commission for Atomic Energy (CNEA).

The contract obliges the group to finish the reactor in 2022 and to be used at Atucha. However, the holding company halted the work to put pressure on the government for an alleged lack of readjustment of work prices established at the beginning of the tasks and not updated despite the evolution of inflation and increase in prices. construction costs.

Currently, Techint and the government are negotiating the terms of the contract renegotiation to recompose the spending equation, taking into account that Rocca claims a loss of nearly US $ 10 million in this situation.

If no agreement is reached, the group threatens to paralyze the work if the government does not decide to touch the costs badociated with this project, which requires investments of nearly $ 800 million and must be completed in three years.

The initials of CAREM refer to the initials of Central Argentina from Elementos Modulares, a low-power (25 MW) nuclear power plant project of national design.

Although the initiative was launched in 2014 under the Kirchner government, with the arrival of Cambiemos at Casa Rosada, the second phase of the civil works was awarded under the program "Key Installation in hand awarded to Techint with a contract of $ 1,148 million in 2017.

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