Peru’s Finance Minister Alonso Segura said country would oppose legal challenge. A US hedge fund has threatened to sue Peru over bonds issued by the country’s former military regime.
Connecticut-based hedge fund Gramercy purchased the defaulted debt at a discount in 2008 after other bondholders failed to reach a deal.
Peru’s finance minister said the government would oppose any legal action outside its borders. Purchasing defaulted bonds on the cheap to make a profit in a settlement is a common hedge fund tactic.
The South American country defaulted on the $5.1bn (£3.33bn) in bonds in the 1980s. Gramercy has threatened to bring a claim against Peru under a tribunal system established in a US-Peruvian trade deal.
This type of action has been called “predatory” by groups in favor of sovereign debt relief plans. Argentina has been engaged in a prolonged court battle with hedge funds over bonds it defaulted on in 2005.
This week Peru has played host to meetings of the World Bank and International Monetary Fund (IMF). Among the topics discussed was how to help country’s restructure debt after a default to avoid drawn-out court battles.
Independent Catholic News
The following is a talk given by Fr Seán McDonagh, SSC, on 22 September at a Rome Seminar, ‘Laudato Si’: Then Greening of the Church’.
Fr Seán McDonagh, SSC,
Criticism of the extraordinary economic and political power of multinational corporations runs right through Laudato Si’. Towards the end of No.34, Pope Francis tells us that the impact of commercial business if often making the world less rich and less beautiful. Further on, in No.37 he decries “proposals to internationalize the Amazon which only serves the economic interest of transnational corporations.” Pope Francis is particularly critical of the way transnational mining corporations operate in poor countries. “There is also the damage caused by the export of solid waste and toxic liquids to developing countries in ways they could never do at home in the country in which they raise their capital. We note that often the businesses which operate this way are multinationals” (No. 51). He returns to this theme in No. 173 where he gives the example of “powerful companies dump(ing) contaminated waste or offshore, polluting industries in other countries.” Continue reading Laudato Si’ and Multinational Corporations