Laptops: Defendants must sell their shares so their companies can enter the PPP

To receive funding for these programs, it will be necessary that the people under investigation do not participate in the business. the government says it enforces international standards

"Odebrecht is still Marcelo Odebrecht," lamented the head of construction in the largest sector of Latin America and the consequences (or lack thereof) of the composition of the company after Lava Jato. An industry lawyer, near the courts, complained about how, as a result of the new official regulations, one of his clients was starting to be foreclosed from future businesses.

public work.

Last week, these rules were the subject of a long debate on the board of directors of a construction company. And, while some see the situation as irreversible, a large company in the industry has compared how the renewed rules for some of the construction and its businesses are similar to those imposed by the IMF on the Argentine economy. "It's like you're designing the company model for the next five years," he said.

The case of corruption (corruption) and emerging risk notebooks in Argentina (the lack of funding) indirectly led to a silent revolution that began to produce changes in the design of the directories of construction companies and their cores. power.

The "noise" takes time, but it exploded two weeks ago with information in newspaper covers. On April 4, the government confirmed that US $ 900 million would be invested to streamline the roadworks awarded.
the public-private participation (PPP) system. The money will come from the Inter-American Development Bank (IDB) – $ 200 million – and international banks (JP Morgan, Goldman Sachs, HSBC, Deutsche Bank, Citibank and UBS), which would provide the rest of the funding.

But neither the IDB nor the foreign bank (let alone the local bank, which would start by paying the funds in the first year) are willing to badume the reputational risk of being badociated with companies dotted with the cahiers scandal. . of Kirchnerism, when the officials were enriched and financed campaigns. The solution developed in August by the Bank for Investment and Foreign Trade (BICE), headed by Francisco Cabrera, called it "the framework of integrity" and obliges those who wish to participate in a PPPs and seeking to secure trust funding created by BICE – one of the few existing options for funding large infrastructure projects – not just to let the individual splashed in front of a board corruption in a bribery case, but also to sell his shares.

"If this integrity event (second instance proceeding, sentence or repentance) is related to a human being, that person will be disconnected from his or her job, function or position in the client structure, in a delay of 15 working days after the detection of said event ", indicates one of the clauses of the framework. "If this integrity event concerns a human shareholder, his right to vote (direct or indirect) will be immediately revoked." In addition, the said shareholder must badign and / or sell all the political or economic rights he has in the company. customer within 30 business days of the occurrence of this event, "adds the following in the text of the trust.

"It is a clear and objective framework of integrity, developed by BICE and the IDB and validated by two international law firms," ​​he said.
THE NATION José Luis Morea, general manager of BICE and one of the promoters of PPP Design, said that the participation or not of the companies in this trust is voluntary. "They can get financing elsewhere," he said. Of course, this possibility is difficult with the current Argentine country risk and with the case of laptops involving more and more companies. And local construction companies know it.

"You are starting to see informally that many of these companies are taking action on their boards." There are preventative and management actions that deviate from the
management. In addition, they are changing the structures of the company and some shareholders are abandoning their participation in the company, "Morea said, adding that the framework is based on the rules of the company.
conformity from many foreign banks. In his view, local banks will also begin to apply this match. This same framework of integrity has also been applied to the call for tenders for an electricity transmission PPP in March and should be extended in the future for this type of projects. .

Preventive actions

"Whoever is in a PPP contract has a period of 30 days to change the shares," said Agustina Morán, head of integrity at BICE. "The truth is that anyone who has an event of integrity knows it, it's no surprise, he will regret talking to his lawyers," he added. Already in the PPP, and during the change of activities, can not be transferred to a family member until the second degree of blood (brothers, grandparents and grandchildren, by affinity: political parents and spouse of the girl or son). For this reason, both BICE officials claimed that they were beginning to see preventative actions in companies before entering the PPP.

"It's a disaster caused by a person who has no idea how she is going to force you to sell the shares of the company," complains the owner of a family-owned construction company. "You agree to sell the shares of your company if you are sued, but in this situation, your guilt is not proven, all this to obtain an IDB loan that does not reach 10% of the necessary investment they are moving away from the auction rules, "he said.

"They went through the rules of
conformity. In Argentina, unlike Brazil, the maneuver was organized by the government, not the companies. Otherwise, they closed the company, "complained the builder. According to a series of consultations, the most important word is utopia. . That they force you to sell, maybe. But, if you can not? ", Added another business man.

In the Argentine Construction Chamber (Camarco) said they prefer not to comment at the moment. "We would lose the industry, it's an idea rejected around the world," added one of the many construction sector lawyers who worry about the issue.

However, this framework could be extended to all public works and not just to PPPs. Last October, in order to promote this resistant idea among some of the companies involved in judicial tugging, the Office of the Fight Against Corruption (OA) took a first step towards making this situation of adaptation to the rules The International Banking System for Businesses Expands: Introduced the guidelines to design, implement and maintain a "good integrity program".

The black hole of construction

900

Millions of dollars

This is the funding announced by the government to streamline road works with the Public Private Participation (PPP) system.

200

Millions of dollars

This is the contribution of the Inter-American Development Bank (IDB). The rest will be paid by a group of private international banks

30

Days for sale

It is in this term that the contractors under investigation must disengage from their actions, a necessary condition for receiving the financing