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BAUEN, day 21

The contract signed with Bauen SACIC stipulated a series of disbursements that the BANADE would make in return for the firm presenting certificates that gave an account of the progress of the work. Shortly after beginning, Iurcovich’s business introduced a series of modifications to the original plans approved by the bank, consisting of increased parking, an expansion of the conference hall, and the construction of a pool. The BANADE approved these modifications, but stated that the loan should be understood in two parts. Part A would correspond to the original project, which is to say, the terms of the soft loan offered on a privileged basis to those who who were constructing hotel infrastructure for the ’78 World Cup. Part B was provided for the improvements and expansions presented later by Bauen SACIC (and which would elevate the hotel to a five-star rating), and would be an ordinary loan, with the same rights and responsibilities that any natural or legal person commits to upon accessing a instrument of this kind (the same interest rates, same indexing regime, etc.). The owners of the Bauen did not agree with this distinction, and alleged, on the contrary, that the bank was at fault in a period of assignment of the disbursements (although it should be clarified that, sooner or later, they received them all, first to last). Following this (they argued in the case they filed against the bank in October of 1981), they had been forced to go out to ask for another loan to comply with the terms of construction of the hotel.

In parallel, the BANADE filed suit against the Bauen for noncompliance in payment. There was also a whole constellation of secondary cases (among them, criminal cases for falsification of seals) that complicate the panorama even more.

What is clear in all this judicial imbroglio, even in the case that the Bauen filed against the BANADE, is not only a problem in the administration of the State bank (which had, in fact, made its disbursements an average of 52 days late), but also the modus operandi of the then-owners of the hotel: fake balance sheets,1 falsification of seals (which would permit it to ask for a new loan, this time from the Río Bank, using as collateral the same property already mortgaged by the loan provided to it by the BANADE) and a disastrous financial situation resulting from bad administration.

  1. “And while this does not have any legal standing, given the conclusions that have been drawn, he pointed out that the accountant of Bauen SA was sanctioned for reporting a false balance, but this sanction was not enforced by the justice system (fs. 105/107 of the file N° 6955 of the Professional Council of Economic Sciences – Court of Discipline, in a separate case)” (“Bauen SACIC c/ National Bank of Development s/ fulfillment operation credit,” case N° 8641, fs. 1076 turn). The false balance consisted of the application of Circular 1050 of the Central Bank of the Argentine Republic for the indexing of the debt, when “according to what was agreed upon, the correct action was to follow the variations of the IPMNG.” A major issue in this dispute between the BAUEN and the BANADE is what regime would be applied for the indexing of the debt in an inflationary context.

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