Guatemala: Legal Dispute over Financial Suspension

Arguing that there were arbitrariness and that due process had not been complied with, former representatives of Financiera de Occidente S.A. decided to file a legal appeal following the suspension of the entity.

Monday, March 2, 2020

On December 13, 2019, the Monetary Board decided to suspend the operations of Financiera de Occidente, S.A., since according to the authorities, management practices were detected that put its solvency and solidity at risk.

At the end of January 2020, it was reported that the entity's assets had changed hands, as Banco de Inversión S.A. had acquired 60% of Financiera de Occidente's asset portfolio.

The former representatives of Financiera de Occidente disagree with the way the case was resolved and have decided to file legal appeals so that the authorities are aware of their disagreements.

José Miguel Ordonez, a lawyer associated with Financiera de Occidente, told Prensalibre.com "... We are now demanding in court that the Monetary Board be forced to recognize the administrative appeal. We are not asking that it be resolved in favor, but that they allow the appeal to be lodged, that they hear it and that they resolve it, and before that resolution there will be other appeals, so that due process and the right to defense are respected."

Pedro Aguirre, president of Corporación de Occidente, stated that "... in the analyses that have been carried out due to the suspension of Financiera de Occidente, it has been concluded that there was an expropriation by the authorities."

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Western Financials Changes Hands

January 2020

In Guatemala, Banco de Inversión S.A. acquired 60% of the asset portfolio of Financiera de Occidente S.A., which was suspended in December 2019.

On December 13, 2019, the Monetary Board reported that because management practices were detected that put its solvency and soundness at risk, it decided to suspend the operations of Financiera Occidente S.A., an entity that at that time represented 0.35% of the total assets of the local banking system.

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Arguing that management practices were detected that put at risk its solvency and soundness, the Monetary Board decided to suspend the operations of Financiera de Occidente, S.A., an entity that represents 0.35% of the total assets of the local banking system.

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