A few weeks after announcing a compensation program for non-institutional investors in its controversial Capital Estructurado I fund, LarrainVial Activos AGF—the alternative investments arm of the Chilean group LarrainVial—has provided more details about the program’s scope. Recently, the manager informed the market that it reached an agreement with 23 contributors to the vehicle.
According to a material event report submitted to the Comisión para el Mercado Financiero (CMF), these contributors from the fund’s Series B, who filed a lawsuit for fraud and disloyal management against STF Capital, LarrainVial Activos, and a group of key individuals, “were deceived by executives” at STF Capital when joining the fund.
Although the management company that created the vehicle asserts that it “had no involvement in these irregularities committed by STF and other third parties,” it decided to launch the compensation program in mid-December. Now, the agreement with the 23 investors brings the total amount of share purchases to 1.121 billion pesos (approximately $1.1 million).
This transaction, they noted in their statement to the regulator, “along with previous fund distributions, represents approximately a 68% recovery for each of the 23 claimants.”
“Additionally, the Administrator has contacted other Series B contributors, who were former STF clients affected by the serious irregularities of that brokerage, which are under judicial investigation, with the aim of arranging a plan to purchase the shares they hold,” the statement added.
The Controversy Surrounding the Fund
The controversial investment fund came under scrutiny from the Public Prosecutor’s Office and the CMF after concerns arose about how Capital Estructurado I was managed and structured. This led to lawsuits, regulatory sanctions, and formal charges against a dozen executives from LarrainVial and STF Capital.
The fund’s objective was to repay the debts of businessman Antonio Jalaff and convert them into an indirect stake in the renowned real estate holding Grupo Patio.
From LarrainVial Activos, they emphasize that they were not involved in the fund’s irregularities. In mid-December, the AGF filed a criminal lawsuit for the crime of fraud, as defined and penalized under Article 473 of the Criminal Code, against Álvaro Ignacio Jalaff Sanz, Antonio Jalaff Sanz, Cristián Felipe Menichetti Pilasi, Luis Patricio Flores Cuevas, Ariel Sauer Adlerstein, and Daniel Sauer Adlerstein, as perpetrators. The complaint also extends to “all others who may be held responsible for the damages caused to the fund.”
This action is “without prejudice to other crimes that may arise during the course of the criminal investigation,” as highlighted in their most recent material event disclosure.
