Buenos Aires Times

economy KIRCHNERITE TYCOON

Oil Combustibles goes bust, court strips Cristóbal López of assets

Trafigura, a Dutch oil firm based, stepped away from take-over talks on Monday. Commercial court judge Javier Cosentino has ordered the continuity of the company’s business activities in order to protect jobs.

Saturday 12 May, 2018
Disgraced businessman Cristóbal López had strong ties with former presidents Néstor and Cristina Kirchner.
Disgraced businessman Cristóbal López had strong ties with former presidents Néstor and Cristina Kirchner. Foto:MARCELO ABALLAY

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A commercial court has stripped disgraced businessman Cristóbal López of control of Oil Combustibles S.A. after Trafigura S.A. (TASA), an oil company based in the Netherlands, stepped away from take-over talks on Monday.

Judge Javier Cosentino confirmed the decision on Friday. His court had ruled in favour of a “cram down” in April, a reprieve which failed to produce the desired results for a company employing hundreds of workers across the country.

On Friday, Cosentino ordered the continuity of the company’s business activities in order to protect jobs, urging comptrollers Francisco Carrega, Liuba Lencova and Carlos Bianchi to continue to seek buyers.

The AFIP tax bureau, which was fighting to recover around US$500 million in overdue taxes, had agreed to a mechanism that would allow the winning bidder to repay the company’s debts in 12 instalments.

With López and his business partner Fabian da Sousa out of the way, the company’s assets will likely be divided up into packages.

UNCERTAINTY

Oil Combustibles was owned by López and Fabian de Sousa, business tycoons with close ties to the former Kirchner administrations. Grupo Indalo, the pair’s mother company, whose major shareholder is Oil Combustibles, hires thousands of workers in the oil and media sectors, including the C5N news channel.

López was jailed in December on a preventative detention order, but released in March. An appeal reversed his release and he and de Sousa were returned to jail. The judge who signed his initial release quit this federal court circuit this week amid controversy.

Jorge Ballestero resigned on Wednesday after three weeks on health leave and a Federal Cassation Court review of his controversial decision. Prosecutors have alleged that López benefited from the leniency granted to him by the the previous AFIP administration to fund other business ventures including a pro-Kichner media empire that includes the C5N television station and radios.

The company had been intervened since February.

A SORDID AFFAIR

In a wide-ranging interview with Perfil before his first arrest, De Sousa told journalist Jorge Fontevecchia that the media expansion of the business conglomerate was funded, at least partially, through the money it “saved” by kicking taxes down the road. It was a public acknowledgement of the charges levelled against López and his business partner.

“It could be said that part of the financing we used to pay for Ideas del Sur and (...) Ámbito Financiero [was] the deferment of payment of one our taxes,” said De Sousa.

This “deferment” was, according to Judge Ercolini, an outright fraud orchestrated by López with the consent of the AFIP tax bureau. The case that brought Cristóbal López down goes as follows: Oil Combustibles, one of the tycoon’s many energy companies, owns 300 petrol stations across the country. By law, 26 percent of all petrol sales are destined for the AFIP. Oetrol stations act as intermediaries to collect the tax.

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