The Institute of Social Security of the Police bought invoices in the stock market of two related companies: Delcorp and Fertisolubles
The alert was launched by the Quito Stock Exchange (BVQ) in August 2019. A letter to the Superintendency of Companies warned about the lack of regulation for the negotiation of commercial invoices of related companies in the stock exchanges. However, the authorities prohibited these operations at the end of 2020, when the Delcorp case had already exploded and the Isspol had bought $ 21 million in these operations.
If a company has already sold its product to a buyer on credit, it can go to the stock market to sell the invoice at a discount and get the money back immediately; in turn, the investor will collect the invoice from the buyer. Those with negotiable commercial invoice operations.
The BVQ sent a communication to the Superintendent of Companies, Securities and Insurance, Víctor Anchundia Places, on August 8, 2019, in which it insisted on its concern that there was “a real economic essence” in these transactions between related companies that had been carried out on the stock exchanges.
The Quito Stock Exchange had warned him on “various opportunities”, not only to Anchundia but also to the Stock Market Mayor, Carlos Murillo, as stated in the document. The lack of regulation or application of “prudence parameters” came from above, from the governing body, the Board of Policy and Monetary and Financial Regulation, and from the Commercial Code approved by the National Assembly and issued in May 2019, and that It replaced another from 1960.
In its 2019 communication, the BVQ also highlighted that there were payment delays in the market that generated uncertainty due to the possibility of “over-indebtedness that generates latent risk in the market”. For this reason, he requested that the Superintendency “carry out an exhaustive review of this stock market product.”
Twenty days later, the then mayor Murillo responded to the BVQ assuring that he was permanently exercising his control work and that on July 25 he had sent a draft rule on commercial invoices to the Monetary Policy and Regulation Board.
The rule would only come at the end of 2020 and was issued by the then Minister of Finance, Mauricio Pozo. The main prohibition is that in the negotiation of invoices through the stock exchanges the seller, the buyer and the investor are not related. The responsibility to determine the relationship fell on the brokerage houses, according to the regulations, which also set a deadline for the payment of bills, 180 days. The resolution that allowed the purchase and sale of invoices on the stock exchanges was signed, in November 2008, by the then Superintendent of Companies, Pedro Solines Chacón, who remained in that position until November 2010. Suad Manssur replaced Solines in 2011 and stayed until 2018.
Although the BVQ letter does not mention the Delcorp case, the negotiation of invoices with its related Fertisolubles has been one of the main challenges against Superintendent Anchundia, who succeeded Manssur and is now facing impeachment in the National Assembly . Anchundia took over as manager and was appointed in March 2019.
Between June 2019 and mid-2020, Delcorp sold $ 39 million to its related Fertisolubles and negotiated these invoices on the Guayaquil Stock Exchange. The Institute of Social Security of the Police (Isspol) bought $ 21 million of those bills and has so far been unable to recoup his investment.
“This type of situation is proof of the incompetence, to say the least, of the State’s control bodies, which causes damage to stock investors and the underdevelopment of the stock market in Ecuador,” said Ramiro Crespo, president of the house Analytica Securities CA
Added that the negotiable invoice product is ideal to give liquidity to small and medium-sized companies; however, it is practically liquidated due to mistrust due to the problems that have arisen.
He regretted that the Ecuadorian stock market remains so far behind while the Colombian, Peruvian and Chilean stock markets advance in the integration of an Andean stock market. (I)
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