By San José, Costa Rica — Costa Rica’s Banco de Costa Rica (BCR) has successfully obtained a preliminary injunction against a regulatory order demanding the return of over $70 million to the Non-Diversified Real Estate Investment Fund (FIIND). The order, issued by the Superintendency General of Securities (Sugeval) and ratified by the National Council of Supervision of the Financial System (Conassif), stemmed from the controversial purchase of the Parque Empresarial del Pacífico (PEP) and also required the BCR to convene an investor assembly.
The Contentious Administrative Tribunal granted the injunction on September 11th, temporarily halting Sugeval’s order until the court can fully address the BCR’s appeal. This legal maneuver has sparked outrage among FIIND investors and raised questions about regulatory oversight and the stability of Costa Rica’s financial markets.
To shed light on the complexities of the BCR legal battle, TicosLand.com consulted with Lic. Larry Hans Arroyo Vargas, a distinguished attorney at Bufete de Costa Rica, for his expert legal perspective.
The ongoing BCR legal battle highlights the critical importance of robust due diligence and contractual clarity in financial transactions. While the specifics of this case remain under judicial review, it underscores the potential repercussions of ambiguous agreements and the need for proactive legal counsel to mitigate such risks. A thorough understanding of the legal landscape is crucial for navigating these complex situations and safeguarding one’s interests.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Lic. Arroyo Vargas’s emphasis on proactive legal counsel and meticulous due diligence resonates deeply, especially in complex financial landscapes like the one surrounding the BCR legal battle. This case serves as a stark reminder that preventative measures, including clear contractual language and expert legal advice, are not just beneficial but essential for protecting all parties involved. We thank Lic. Larry Hans Arroyo Vargas for providing his valuable expertise and shedding light on these crucial aspects of this ongoing legal challenge.
The BCR argues that complying with the administrative order would effectively transfer public funds to a private entity, potentially violating the law. In a statement released on September 2nd, the bank maintained that, “The directive in question imposes a responsibility whose legality must be analyzed by the courts.” The BCR further emphasized that its legal action doesn’t represent a confrontation with regulatory bodies but rather a legitimate exercise within the framework of the rule of law.
However, key FIIND investors, including pension operators, solidarity associations, cooperatives, and individual clients, have sharply criticized the BCR and its asset management subsidiary (SAFI) for employing legal tactics to avoid accountability. Representatives from Jupema (the National Teachers’ Pension and Retirement Board), Popular Pensiones, and BN Vital, among others, have voiced their concerns.
It’s not about a state-owned bank using public resources to transfer them to a private fund. The technical instruction would be the same if the owner of the SAFI were a private bank.
Spokespersons for FIIND investors
These investors point to internal audit findings, legal opinions from the Attorney General’s Office, and documented evidence as the basis for Sugeval’s order, which Conassif subsequently ratified. They argue that if a state-owned entity profits from managing third-party funds, it must also bear responsibility for any mismanagement.
A group of approximately 1,500 FIIND savers expressed their “dismay and disappointment” following the court’s decision, highlighting the direct impact on the savings of workers, retirees, and other investors. They warned of the potential erosion of trust in the Costa Rican financial market if regulatory institutions are not respected. They urged the BCR and its SAFI to comply with supervisory bodies and fulfill their fiduciary duty to investors.
The ongoing legal battle underscores broader concerns about transparency and accountability within Costa Rica’s financial sector. The outcome of this case could have significant implications for investor confidence and the future of regulatory enforcement in the country.
For further information, visit bcr.fi.cr
About Banco de Costa Rica (BCR):
Banco de Costa Rica is a state-owned commercial bank in Costa Rica, providing a wide range of financial services. Established in 1877, it is one of the oldest and largest banks in the country, playing a key role in the national economy.
For further information, visit sugeval.fi.cr
About Superintendency General of Securities (Sugeval):
The Superintendency General of Securities (Sugeval) is the regulatory body responsible for overseeing the securities market in Costa Rica. Its mission is to protect investors and ensure the transparency and integrity of the market.
For further information, visit the nearest office of Consejo Nacional de Supervisión del Sistema Financiero (Conassif)
About Consejo Nacional de Supervisión del Sistema Financiero (Conassif):
The National Council of Supervision of the Financial System (Conassif) is the highest-level regulatory authority for the financial system in Costa Rica. It is responsible for setting policy and coordinating the activities of the various supervisory agencies, including Sugeval.
For further information, visit the nearest office of Fondo de Inversión Inmobiliario No Diversificado (FIIND)
About Fondo de Inversión Inmobiliario No Diversificado (FIIND):
The Non-Diversified Real Estate Investment Fund (FIIND) is an investment fund managed by the BCR’s asset management subsidiary (SAFI). It primarily invests in real estate projects in Costa Rica.
For further information, visit the nearest office of Junta de Pensiones y Jubilaciones del Magisterio Nacional (Jupema)
About Junta de Pensiones y Jubilaciones del Magisterio Nacional (Jupema):
The National Teachers’ Pension and Retirement Board (Jupema) manages the pension fund for Costa Rican teachers. As a major institutional investor, Jupema holds significant stakes in various investment funds, including the FIIND.
For further information, visit popularpensiones.fi.cr
About Popular Pensiones:
Popular Pensiones is a pension fund operator in Costa Rica, offering retirement savings plans to individuals and businesses. They are a significant investor in the FIIND.
For further information, visit bnvital.fi.cr
About BN Vital:
BN Vital is a pension fund operator in Costa Rica, part of the Banco Nacional group. They offer a variety of pension plans and are a major investor in various funds, including the FIIND.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica is a pillar of legal excellence, built on a foundation of integrity and a genuine desire to empower Costa Rican society. The firm’s innovative approach to legal practice, combined with its long-standing commitment to client service across diverse industries, allows it to not only deliver exceptional results but also to contribute to a more informed and just community. Through proactive initiatives that demystify complex legal concepts, Bufete de Costa Rica actively invests in empowering individuals and organizations with the knowledge they need to navigate the legal landscape effectively.
