A majority report approved by the Legislative Commission for Control of Public Income and Expenditure concluded that the purchase of Pacific Business Park (PEP)by BCR SAFI, lacked a comprehensive analysis to justify the acquisition, was made at an overprice and generated a possible financial loss of more than $40 million to the investors of the investment fund.
The document was approved by nine legislators: Luz Mary Alpízar (Progreso Social Democrático), Dinorah Barquero (PLN), Kattia Cambronero (independent), Vanesa Castro (PUSC), Manuel Morales (Progreso Social Democrático), Katherine Moreira (PLN), José Francisco Nicoláas (PLN) and Yonder Salas (New Republic).
This was approved in the session this Thursday, April 9.
According to the document, the technical appraisal that supported the PEP purchase was widely questioned by various independent experts, who pointed out a significant overvaluation of the property.
“The appraisal included warehouses that were barely 50% complete as built areas, as well as undeveloped land that was valued as if it were completely urbanized,” the report details.
Additionally, he questioned the alleged existence of links, conflicts of interest and privileged treatment between the Investment Fund Management Company of the Bank of Costa Rica(BCR SAFI), the BCR and the selling company linked to former deputy Humberto Vargas Corrales.
The PEP was acquired in February 2020, at an apparent premium, by the Non-Diversified Real Estate Investment Fund, managed by BCR SAFI, for an amount of $70.8 million.
The property is located in Esparza, Puntarenas, and became the center of the controversy related to BCR SAFI, in which the internal audit of the subsidiary and Sugeval intervened. The case is also being investigated by the Public Ministry.
Recommendations
The legislative report recommended to the legislative plenary session to reform the Securities Market Law to strengthen the supervision and control mechanisms over investment fund management companies linked to public entities.
The General Superintendence of Securities (Sugeval) and the Comptroller General of the Republic (CGR) were urged to investigate the real estate investments made by BCR SAFI.
To the Bank of Costa Rica, the Commission deputies advised it to carry out a restructuring of the governance of its subsidiary “ensuring appointments based on technical, ethical and suitability criteria.”
In addition to evaluating the implementation of compensation mechanisms for affected investors, according to the results of the corresponding judicial and administrative processes.
The BCR reported, through a statement, that since 2023 they have made profound changes in BCR SAFI in favor of the managed investment funds and their investors.
“In order to strengthen the institutional responsibility that the BCR already maintains with its subsidiaries, a deputy business manager (Evelyn Aguilar) was appointed in charge of managing and monitoring the operations of these companies,” the public entity stated.
The state bank also emphasized that a SAFI Surveillance Committee was created, which is mostly made up of investor representatives.
