The government’s plan to take over bankrupt soybean processor Vicentin SAIC suffered a setback on Friday, after a judge ruled the company’s management should continue to run the business for now.
Judge Fabian Lorenzini in Santa Fe Province reinstated ousted Vicentin executives to their positions and said government officials who’d seized the company by decree should step aside to perform a supervisory role.
Vicentin’s external public relations representatives provided a copy of Lorenzini’s ruling, which limited the power of trustees appointed by the state. The judge said those intervening on behalf of the state can only act as observers or watchdogs and not administrators.
"The continuity of the original administrators would be appropriate, with the same powers that they held at the time prior to the state's intervention," Judge Lorenzini wrote.
He also ruled that his court was not the proper venue to decide whether the government's intervention in the nearly-century-old grains trading company was constitutional.
It remains unclear how President Alberto Fernández’s government will proceed before the courts. A spokesman for Productive Development Minister Matías Kulfas, who is leading the expropriation plans, could not immediately be reached for comment.
Lorenzini has been overseeing Vicentin's bankruptcy, which includes the resolution of approximately US$1.4 billion in debt, of which around US$255 million is with Banco Nación. That debt pertains to loans granted under the previous government led by former president Mauricio Macri, deals which are now being probed by the courts.
Vicentin, the fourth-largest company of its type in Argentina, was a major contributor to Macri’s unsuccessful re-election campaign.
A victory for detractors
The ruling represents a victory, or at least a temporary one, for detractors of the government who said that it could not take control of a company that is in the hands of the courts.
Critics of the government’s move to expropriate the agro-giant have called a “banderazo” demonstration for Saturday in opposition to the move, which has also been the subject of cacerolazo pot-banging protests.
Detractors say the government’s June 9 DNU emergency decree – which involved taking over Vicentin for 60 days and appointing trustees while Fernández evaluated an expropriation bill and other options to rescue the firm – was an overreach by the Executive branch in judicial matters.
President Fernández has said he is open to other paths and is waiting to send an expropriation bill to Congress until those avenues have been explored. He has repeatedly argued that the intervention is a move to protect a key strategic firm in Argentine hands and protect jobs amid the coronavirus pandemic. Other officials have said the move to expropriate the firm would deliver “food sovereignty” for Argentina.
The nationalisation of Vicentin – a once family owned business that is now home to one of biggest soymeal manufacturing factories in the world – was fiercely rejected by business leaders and other large agro-exporters. By contrast, many small scale producers and cooperatives – the firm’s main creditors – have welcomed the move.
Vicentin is the largest Argentine exporter of soybean meal for feed and edible soybean oil. Argentina is the main world supplier of these products.
The grains exporting sector is a major source of dollars for the government, which desperately needs greenbacks.