For Chile’s Wealthy President-Elect, Victory Spells Huge Payoff
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By Benjamin Witte-Lebhar
Upside Down World
Friday, Jan 22, 2010
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Chile President Elect, Sebastian Piñera |
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Chilean
president-elect Sebastian Piñera, who narrowly won last Sunday’s runoff
election against Sen. Eduardo Frei of the governing center-left
Concertación coalition, has added new meaning to an old adage: to the
victor go the spoils.
Piñera, a billionaire businessman and
former senator from the center-right National Renovation (RN) party,
beat Frei 51 percent to 48 percent to end the Concertación’s
two-decade-long grip on power and become Chile’s first elected
conservative president in more than half a century.
For
Piñera, however, the win has more than just historical significance.
It’s also meant a huge personal payoff for the mogul/politico, who has
seen his extensive stock portfolio – which includes a controlling stake
in Chilean airline leader LAN – balloon in recent days.
On
Monday Jan. 18, the day after the election, the value of Piñera’s
personal investment firm – Axxion – jumped some 12 percent. The holding
company shot up another 21 percent Tuesday, forcing the Chilean market
to actually suspend transactions of the stock. On Wednesday, however,
trading on Axxion resumed, rising again to reach a three-day
accumulative gain of 40 percent.
So far it’s not clear exactly
how much money the president-elect has pocketed from the stock surge.
Some news outlets put the figure at several hundred million dollars, a
not unreasonable estimate given that even before the Axxion bonanza,
which began in earnest following Piñera’s Dec. 13 victory in Chile’s
first-round presidential election, the 19 percent stake in LAN
controlled by the investment firm was valued at approximately US$1
billion.
Through another investment firm, Piñera owns an
additional 7 percent of LAN, as well as a major television network and
a substantial stake in the country’s most successful football team,
Colo-Colo. In 2009 he figured on Forbes Magazine’s “The World’s
Billionaires” list in a multi-way tie for the 701st position. The
president-elect will almost certainly move higher up that list this
year.
Conspicuously silent on the issue early in the wek, both
Chile’s media and Piñera’s political opponents have finally begun
drawing attention to matter. On Wednesday, the outgoing finance
minister, Andes Velasco, said it would have been “much better” if
Piñera had sold off his assets before, rather than after the election.
“My
opinion as a citizen,” said Velasco, one of President Michelle
Bachelet’s most widely respected cabinet officials, “is that I wish the
then-candidate would have gotten rid of his stocks at the right time.”
Chile’s
now-empowered conservatives shot back. Senator-elect Lily Perez, a
member of Piñera’s RN, called on Bachelet to “shut up” her loose-lipped
ministers. “Three days after the presidential election and the only
thing Minsiter Velasco knows how to do is harshly criticize Sebastian
Piñera, who is the president elect of Chile,” she said.
This is
not the first time eyebrows have been raised over the mogul/politico’s
conflicts of interest. In 2007 the country’s securities regulator, the
Superintendencia de Valores y Seguros (SVS), fined Piñera more than
US$600,000 after determining he had engaged in insider trading with LAN
stock.
A group of congressmen from the Party for Democracy (PPD)
and Socialist Party (PS) are asking that the SVS once again investigate
Piñera’s business dealings. “Why did he refuse so flatly refuse to sell
his stocks before being elected president?” questioned PPD Dep. Maria
Antonieta Saa. “Because he’s a man that knows the financial market so
well, we suspect the must have known that his stocks would rise when he
was elected president.”
The president-elect himself had a
different take on the matter. “I am already very disconnected (from the
investments),” he told reporters Wednesday. “The truth is that I have
not been following the stock market over the past few days."
Upside Down World
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