Hear
Involved in an investigation into alleged fraudulent maneuvers with public bonds in some of the companies in its group, Banco Galicia confirmed today that made a payment of more than $28,000 million to the Central Bank with the objective of “the comprehensive reparation of the alleged damage” that the movements investigated generated to the assets of the monetary entity.
The decision is linked to a summary that the National Securities Commission (CNV), the body that regulates the capital market, began at the end of April, where it accuses the Galicia, the largest private bank with Argentine capital, of wash trade (artificial transactions).
As stated in file 87/2024the entity accuses operations involving Banco Galicia, Inviu and Galicia Securities (group firms), carried out in February, in which “high” and “higher than normal” volumes were moved, which allowed prices to increase and, finally, affect the BCRA.
It is that, according to the CNV’s suspicions, These operations were carried out to increase the amounts that Galicia collected when executing the insurance (puts) guaranteed by the Central Bank for the bonds involvedwhich allow banks to receive the pesos in exchange for the instruments, before their maturity.
At the time the summary was initiated, the BCRA estimated that “The expansive monetary effect, as a consequence of this execution, was $112,794 million, $23,072 million higher than that resulting from having been exercised at the extrapolated price.”.
For this reason, yesterday Galicia notified the CNV that it “voluntarily” delivered some $28,837.9 million to the BCRA in concept of ““the full reparation of the alleged damage that the BCRA claims to have suffered” for the execution of the puts.
There, it is confirmed that the sum is composed of $23,072 million in capital -is the amount initially estimated by the BCRA- and about $5,765.9 million in interest.
According to Galicia, it is about a gesture of “good will” and to “recompose relations” with the monetary entity. Meanwhile, The investigation by the CNV continues and is under “stock market secrecy” until its completion, an extensive administrative process that could continue beyond 2025.
“The offer was made with the purpose of restoring the trust historically built by the Bank with the BCRA, throughout his extensive career, as well as repair his reputation and that of his related companies and of the individuals summed up by that Commission,” insists the Galicia statement, regarding an investigation that includes among those summed up the directors of the entity.
However, the bank denies the accusations in which it is involved. “The aforementioned proposal was made without recognizing any facts or rights linked to the circumstances subject to investigation by the CNV.“, states the letter Galicia sent to the CNV and the authorities of the Buenos Aires stock exchange.
Since its first notification, at the end of May, the investigation which targets Banco Galicia, Galicia Securities and Inviu, shook the local financial system. Although the bank defended itself against these accusations, days after the investigation began, Pablo León, a member of the bank’s “small table,” left the company by “personal decision,” as reported.
The executive had joined the entity in 1995, and served as money desk manager in the role of executive vice president of the financial area. He was also chairman of the board of directors of Inviu, a firm specialising in fintech, and of Galicia Securities, the group’s stockbroking company dedicated to investment issues in the capital market.
