US$500 million offer for agricultural mega-company arouses suspicion in Paraguay
RIO DE JANEIRO, BRAZIL – An offer placed for one of the largest agricultural companies in Paraguay has raised some questions and suspicions as to who might be behind the millionaire acquisition for around US$500 million. The company in the process of receivership was part of a bank holding company that ultimately filed for bankruptcy and distributed its assets among creditors.
Paraguay Agricultural Corporation (PAYCO) is among the valuable assets part of the structure of the traditional and powerful Portuguese Espirito Santo clan whose multinational empire was founded in 1869 and ended scandalously after cross accusations within the same family partners and associates, for illegal practices and money laundering.
At its peak, the economic group became the largest in Portugal, with some 400 companies and 25,000 employees spread worldwide, including its agricultural operations in Paraguay with some 500 properties.
Now, within the framework of the private sale tender ordered by the court in charge of the bankruptcy in Luxembourg – which was awarded to EXAN Capital Realty – the name of one of the bidders to take over PAYCO has drawn attention. It would be entrepreneur José Antonio Benítez, an old partner of the Portuguese family, who would have presented a US$500 million offer to buy PAYCO.
Some suspect that Benítez – with Paraguayan citizenship – would be part of a cross operation so that the former owners of BES (Banco Espirito Santo) may recover the impressive Paraguayan company, which has over 130,000 hectares and more than 40,000 head of cattle.
Benítez – involved in court cases both in Brazil and in the United States – would have participated in numerous deals in the past 10 years with the Espirito Santo family, which would thus be able to re-enter the South American agricultural industry by his hand, despite the fact that the Luxembourg justice system forbids him to do so.
FALLEN DYNASTY
The history of the powerful Espirito Santo family is the stuff of movies. They went from poverty in the 19th century to being considered “the Rockefellers of Portugal”… to again fall into the gutter of public opinion. The patriarch, José Maria, had a natural talent for mathematics and business. So much so that at the age of 19 he founded his first business: a currency exchange company. He made so much money that he managed to found one of the most renowned financial institutions in Portugal.
But decades later, it would be one of his grandsons to bring it all down. The heir to the clan that ultimately led everything to its downfall was Ricardo Salgado Espírito Santo, 78 years old. He took control of the institution in 1972 and enjoyed its best times. However, after more than 20 years of glory, everything changed.
After the 2008 financial crisis, he was forced to engage in several fraudulent schemes to maintain control of BES and cover up a gigantic financial hole, calculated in billions of dollars.
However, the lie was put to an end by a whistleblower. A historical partner of the holding company learned that the Espirito Santo’s corporate driver was also taking over his business. Pedro Queiroz Pereira owned one of Portugal’s largest cement companies and managed to keep control of his business despite the fact that his partner in other businesses was secretly buying his own sisters’ shares.
After winning the internal battle, Queiroz managed to keep his company and knew it was time for revenge: he went to the Central Bank of Portugal to reveal what was really going on with BES. Espirito Santo could no longer hide the hole of over US$8 billion shown in its accounting books. The Portuguese monetary entity intervened, the family was removed from its management and the bank nationalized until its full liquidation in 2016.
These were not easy times for the patriarch of the family that knew how to reach the jet-set and European royalty throughout his life: he faced a lawsuit for money laundering and was arrested at his mansion in Cascais-Estoril in July 2014. The family lost practically everything: 500 properties under his name were put up for auction. PAYCO is among them.
The former family hierarch lives haunted by court proceedings. He is in court every week in Portugal, Miami and Luxembourg. He can no longer exercise his profession as a financial guru and paid US$4 million as a result of the BES fraud. In addition, he is accused of laundering €27 (US$30.7) million in the Monte Branco case, according Spanish newspaper El Mundo.
In recent years, the government of Paraguay has been characterized for having strengthened its financial structures to fight money laundering and suspicious operations. Alerts should be raised once again.
BES IN PARAGUAY
Espírito Santo bought the Sociedad Agrícola Golondrina (SAGSA) in 1976. More than 20 years later, in 1997 it bought Ganadera Corina Campos y Haciendas and its presence in Paraguay was a fact. Five years later, SAGSA established a consortium with Unique Wood Paraguay forestry company. This consortium was called Forestería Certificada en Paraguay (ForCerPa). But expansion continued: in 2012 Ganadera Corina Campos y Haciendas acquired the Carandayt farm.
In 2014, the year the family empire collapsed, Sociedad Agrícola Golondrina and Ganadera Corina Campos y Haciendas merged, giving rise to the creation of Paraguay Agricultural Corporation, PAYCO. “Thus, PAYCO begins to operate covering the three productive sectors, agriculture, livestock and forestry,” according to its website description.
Key Facts
— Deep Dive
— For the complete picture, read our in-depth guide: Paraguay: Washington's Most Valued Ally in Latin America
More: Latin America news in English, every day from The Rio Times.
Editorial responsibility: Matthias Camenzind, Editor-in-Chief · Editorial standards · Report an error