Chile Electric Directors Fined
Oct. 24, 1997
SANTIAGO, Chile (AP) _ The government on Friday fined the board of directors of Chile's electric giant Enersis following the sale of a stake in the company to a Spanish utility.
The Superintendent of Securities and Insurance said each of the seven directors will have to pay 3.9 million pesos ($34,000) for ``failing to properly review'' the agreement with Endesa, the state-controlled electric utility in Spain. The transaction has been considered damaging to the pension funds of millions of Chilean workers.
Earlier this week, a similar fine was imposed on Jose Yuraszeck, the chief negotiator of the ``strategic alliance'' between the two companies. Yuraseck was fired as general manager of Enersis last Monday.
Those fined include newly appointed board chairman Carlos Caceres, a key political figure in the former military dictatorship of Gen. Augusto Pinochet.
The sale last July of 29 percent of Enersis to Endesa was initially hailed as a major success. But since then, it has been sharply criticized, especially after it became public that 14 Enersis executives were getting one third of the $1.5 billion involved in the transaction.
Critics of the transaction, including members of congress, contend the executives who handled the negotiation made concessions to Endesa in exchange for benefiting personally from the agreement.
Yuraszeck, who was the chief negotiator, and other executives have denied any wrongdoing.
The government joined in the criticism because the administrators of private pension funds of millions of workers have $3.5 billion invested in Enersis stock.
Both Endesa and Enersis have said they are willing to renegotiate the agreement.