Guillermo Zuloaga

The President of Globovision, Guillermo Zuloaga, has been formally charged by the Attorney General’s office with “hoarding vehicles” at a residence in the Los Chorros district of Eastern Caracas. Charges of usury could also follow when investigations are completed. Both charges under the Speculation and Hoarding Law passed in January 2008 carry jail time.
 
A detailed investigation carried out by the Minister of Commerce, Eduardo Samán, uncovered a network of companies and cross interest stockholdings headed up by two companies – Toyosan and Toyoclub. Zuloaga is President of both companies, which have the same address and telephone number.  Other stockholders include Zuloaga’s son, the Presidents of the Banco Exterior and the Bolivar Bank in this network dedicated to buying and selling Toyotas acquired either though import or from the Toyota factory in Venezuela.
 
The 24 vehicles discovered at one of Zuloaga¡s residences were fully investigated by the authorities. It transpired that some on them had been held for 11 months without being sold to end consumers. The vehicles were held in order to create shortages and push the price up.
 
Minister Samán gave the example of a Toyota Land Cruiser which had been bought by Toyoclub for Bs.F.69,000 (US$32,100) in June 2008 from the Toyota plant, sold to Toyosan some months later for Bs.F 91,000 (US$42,325) and now is available in internet for Bs.F 224,000 (US$104,200). These companies were laundering vehicles much as drug traffickers launder dollars, according to Foreign Minister, Nicolás Maduro.
 
Minister Samán, condemning this speculation which he clearly classified as usury, went on to say that the big business was not only the actual sale of the vehicle but the financing with the bank and the premiums payable to the insurance company. He confirmed that he would ask the Banking Controller, Sudeban, to check out all car loans made in recent years so as to establish the breadth of the problem.
 
Having done some quick calculations, based on the 6057 vehicles sold by Toyoclub and Toyosan in 2008 as estimated by Minister Samán, these companies could have made an additional US$250 to US$280 million dollars by overpricing these vehicles.
 

Dr. Perla Jaimes

The Attorney General, Dr. Luisa Ortega Diaz, also informed the media that the lawyer, who represented Zuloaga’s interests during the raid on May 21st, is NOT the legal representative of either Toyosan or Toyoclub. Dr. Perla Jaimes is, as we wrote in Globovision digging its own grave in Venezuela , the Globovision lawyer. Dr. Oregta Diaz said that Dr. Jaimes was usurping her functions and could also be charged with obstructing justice when the authorities carried out the raid.
 
In a further development, the Attorney General also informed the public that anyone who felt that they had been overcharged when buying a vehicle would be able to go personally to the Attorney General’s offices up and down the country and file a formal complaint. Mass investigations are expected since this is a question of at least 400,000 vehicles.
 
President Chávez requested that Minister Samán investigate activities at Toyota itself, examine production data as well as their official dealership network. Samán also filed a report at the Attorney General’s office with a complete flow chart of Toyclub and Toyosan’s activities.
 
In other developments Minister Samán’s team found another 20 Toyotas hoarded in the Maripérez distrct of Caracas belonging to Maripérez motors as well as others hidden in Valencia.
 
This is not the first time that private banks have been in hot water concerning car loans. From 1996 to 2003, banks made loans but at the end of the term asked for a special, one off payment amounting to half of the vehicles value to take the loan off their books.
 
This “balloon quota” was declared illegal by the Supreme Tribunal in January 2003 and the banks were ordered to restitute monies paid in excess or vehicles repossessed and auctioned off. When the banks did not act for almost three years, disobeying the Supreme Tribunal, arrest warrants were issued for all the banks’ presidents and this solved the problem.
 
This time around, the banks should be aware that President Chávez is in a “nationalization frame of mind”. Banco de Venezuela has just been nationalized and the Attorney General, taking an active role in this nationwide usury scandal, suggested that the National Assembly should pass a law regulating the sale of ALL vehicles, both commercial and private.
 
The Venezuelan opposition stridently defends private enterprise but illegal and unethical activities are simply opening the door for the government to take more and more control of the economy. The Consumer Defense Institute, INDEPABIS, is really clamping down on supermarkets, hardware stores, pharmacies, large Walmart-type chains, car dealers, spare parts importers, private school and university fees, restaurants, bakeries and even hairdressers. They are sometimes closed for days as a penalty for violations. When they reopen, a visit from the IRS (SENIAT) usually follows.

Yesterday Indepabis closed Castellana Motors on Avenida Francisco de Miranda in East Caracas. Indepabis forbade further sales of vehicles and ordered all vehicles to remain there until the dealership paid back around Bs.F. 1.050.000 (US$500,000) to customers who has purchased vehicles in April and May this year after the government investigation found that they were overcharged.
 
This action has been a long time coming to protect the public. However, one section of the public is so dissociated from reality that they have even held demonstrations, demanding that parents for example, be allowed to pay more to private schools and universities!
 
We can expect the usual media circus when Zuloaga has to go and testify at the Attorney General’s office. I, for one, cannot remember any high profile, “white collar” businessman being jailed in Venezuela in the last 30 years.
 
Will this be the first one?