CONFISCATIONS / Coercive Trial
More evidence of persecution: an administrative resolution in lieu of trial based on political interests, lacking legal and accounting fundamentals.

The objective: to justify the confiscation and keep the television channels TC, Gamavision y CN3 in addition to the assets appraised at more than 1 billon de dollars, putting an end to this story and having absolute no accountability to anyone.
5 years after the confiscation an administrative resolution in lieu of trial was made based on imaginary amounts with which they intended on legalizing the confiscation.
That’s how they covered up losses of La Previsora  

On July 8, 2008, in a hasty act, the Agency of Guaranteed Deposits, AGD, confiscated assets, businesses and media outlets from the Isaias Group valued at approximately 1billion USD, without any legal or accounting basis, not even an audit determining the alleged losses, but rather, with a simple report on agreed procedures issued by Delloite and Touche.

On April 20, 2012, the AGD presided by Pedro Delgado, executed an administrative resolution in lieu of trial against the Isaias brothers, with a false amount backed by persecutors and political interests, issuing a payment order in the amount of 477 millones de dólaresan amount not based on any legal or accounting principles. The payment ruling was issued for one sum and later other amounts were added that had nothing to do with the original payment order, finally summing up to an non-payable amount of more than 1.088 billion USD, an amount they suspiciously intend on comparing to the value of the confiscated assets.

On September 21, 2009, the Banking Board issued a resolution where it determined the legal calculation of the asset deficit of the 26 banks that were liquidated during the banking crisis of 1999.

Based on that resolution and through the official registry dated October 7, 2013, , el Superintendente de Bancos Pedro Solines, the Superintendent of Banks Pedro Solines, set the amounts of the liens of the aforementioned 26 banks. The loss amount of the aforementioned 25 banks- excluding Filanbanco – was set at 1.861 billion USD. The amount attributed to Filanbanco was 355 millones; es decir,which means, it was 122 million USD less than the amount that the AGD had stated in its administrative resolution in lieu of trial in April 2012.

However, from those 355 million, 291 corresponded to the losses occasioned by La Previsora Bank when it was merged with Filanbanco and has absolutely nothing to do with the administration of the Isaias brothers. If we go on to subtract from that sum the 91 million of Filanbanco’s assets you obtain a positive accounting entry of 27 million USD. However, the report issued by the Superintendent of Banks omits the losses occasioned by La Previsora.
 
They forged an administrative resolution in lieu of trial against the Isaias brothers 5 years after the confiscation so that they can pretend to justify the legality of said confiscations. The sums can be covered up but the accounting truth cannot.
Coecive trial with forged amounts and political agenda
The administrative resolution in lieu of trial lacked legal and accounting fundamentals. Since 2008, through letters and publications, the Isaias brothers have asked the various authorities, such as, President of the Republic, ministers of finance, officers of the AGD and UGEDEP for the supporting documents that allegedly established the 477 million US dollars of the administrative resolution in lieu of trial and have never received a response from anyone.


• It is obvious that the supporting documents do not exist because it’s a false amount based on calculated political interests.

• That is why they filed for an administrative resolution in lieu of trial using a method of calculation way beyond the scope of the law.

• That is why they confiscated assets based on false amounts, politically based, without a legal basis and lacking accounting principles.

• That is why the Superintendent of Banks arrived at an amount different from the amount fixed by the UGEDEP.

• That is why they do not deliver the supporting documents or the justification of the amounts cited in the administrative resolution in lieu of trial.

• That is why the losses of La Previsora are blamed on the Isaias brothers when they actually had nothing to do with that.

• That is why the Government covers up the truth and has no accountability whatsoever on this case.

• That is why the Isaias are treated in an discriminatory manner, totally different from the manner in which the shareholders of the other 25 banks that were liquidated as a result of the 1999 banking crisis, who did not have their assets confiscated, nor were criminal trials filed against them, nor were they used as political gain, nor judicially persecuted as has occurred with the Isaias brothers.

The Isaias brothers have been unjustly convicted because it is not in the best interest of the Government to find them innocent because then they would have to pay restitution to the tune of 1 billion USD or give them back all their confiscated assets: television channels, assets and businesses.



Anexos
Letters sent to the President Correa and other officials


1. Letters of the attorney-in-fact of the Isaias Group to President Rafael Correa Delgado

• Letter dated October 9, 2008
A request to update the Deloitte & Touché report in order to determine the true amount of the risk assets of third parties and other assets that to date have pending payments by the debtors so that Sirs Roberto and William Isaias Dassum can immediately proceed to purchase them.

• Letter dated November 17, 2008
A request is made to comply with the Resolution by the Banking Board that states “authorize the hiring of an external audit with international partners to review the subsequent facts of the Deloitte & Touché report…” the only manner in which to determine whether or not there were losses till 12/02/98.

• Letter dated February 19, 2009
It is reported that very little progress has been made towards a definitive solution of the Isaias case; new obstacles appear all the time; the President of the Republic is asked to intervene in order to speed up the process and eliminate the obstacles in order to finalize this negotiation which would be quite beneficial for the confiscated businesses, its employees, their families and the Ecuadorian state.

• Letter dated May 9, 2009
Ten months have passed since the General Manager of the AGD proceeded to confiscate assets and businesses of the former shareholders of Filanbanco and unfortunately, some third parties as well, based on the 2001 Deloitte & Touché report. The Banking Board ordered the update of the amount of Filanbanco’s assets as of 12/02/98 and we have promised to buy said assets, in the absence of any legal obligation to do so, because beyond the economics of it all, we aspire to live in peace after ten years of persecution.

• Letter of September 29, 2009
The Superintendent of Banks has taken 14 months to present information that you have defined as nonsense; that information is unknown. We have sent the President an update of the Deloitte & Touché report that we conducted. Moreover, worst case scenario, the Isaias family assumes the negligence, irresponsibility and even the corruption of the State administration of Filanbanco. The updated balance of the D&T report does not exceed $284.3 million dollars. In reality, it should be $54.4 million USD. Therefore, the sum of $400 million indicated by the SIB only obeys the intention of that institution to conceal their decade long sins and cause harm to the Isaias.

• Letter dated October 19, 2009
In various interviews the Superintendent of Banks states that the interests sought to be collected from the Isaias family should be the same that were agreed upon by the defaulting debtors with the bank. The shareholders of a bank do not respond for unpaid assets of the institution; the law states that the shareholders respond exclusively for the liabilities of the bank, specifically for the deposits by the public.

• Letter dated January 8, 2010
Representing the businesses confiscated by the AGD and Roberto Isaias Dassum; the Isaias family would like to reach an agreement with its government to stop the confiscations of their businesses, to prevent further loss of value and to put an end to the existing judicial proceedings in Ecuador and the United States. After various problems the Liquidator of Filanbanco was held responsible for the update. The update contained blank spaces, inaccuracies and imprecision that we covered in this communication.

• Letter dated February 9, 2010
Three meetings were held after the confiscations, two in 2008 and another in 2009, since then we have never been heard. We have asked to meet with the President and his government decision makers on this case so that we can present our arguments regarding the update of the D&T report since he has been erroneously informed on this topic.

• Letter dated February 10. 2010
Regarding the assets confiscated from the Isaias family that are now the responsibility of the Trust Fund CFN-AGD No More Impunity, the President of the Republic is informed of the inadequate and worrisome management by the people managing these assets so that they can be investigated and penalized accordingly. Some cases are detailed here.

2. Letters of the attorney-in-fact of the Isaias Group to President Rafael Correa Delgado

• Letter dated June 15, 2009
A little less than a year has passed since the order was given to confiscate the assets of the Isaias family and others for Filanbanco’s unpaid assets and not deposits as called for by law. All the problems related to this issue are pointed out to the President; it is impossible to speak to anyone; in spite of his instructions the businesses deteriorate.The conduct of the AGD violates ethics and morality, in addition to being illegal and arbitrary.

• Letter dated October 15, 2010
Mister President history is repeating itself; Roberto Isaias Dassum handed Filanbanco over to the Ecuadorian State (AGD) on December 2, 1998. It was a solvent bank experiencing liquidity difficulties due to the systematic crisis of the country at the time. The State administered it until June 2001 and bankrupted it; at the end we have been held accountable for the robbery and mismanagement at the hands of the governmental administration.

3. Letters from Roberto and William Isaias’ defense attorneys to the President of the National Assembly

• A law in favor of corruption?
We should all be equal before the law. The exceptions and privileges are hateful and normally generate injustice and corruption. The project for the Code of Planning and Public Finance contains Transitional Dispositions ripe with exceptions and privileges favoring an administration that lacks transparency and holds the businesses confiscated from the Isaias family in 2008; various points are mentioned. These dispositions create the “Trust Fund AGD-CFN Total impunity”; a private monster with state, executive and judicial powers; furthermore, it is excluded from complying with the laws of public contracting and transparency and that will administer and sell confiscated businesses without any kind of control or supervision.

• President sends the Assembly a letter giving his cousin carte blanc while the latter sells Servientrega
The economist Pedro Delgado, cousin of Rafael Correa and President of the Trust Fund, who does not render any accountability in the administration of the confiscated assets pertaining to the Isaias family, announced that he had sold 50% of the shares of Servientrega valued at $3.4 million USD to two foreign companies; the buyers had been warned months ago that they would be sued; this first sale was done the day after the President had sent an urgent project of economic interest to the Assembly that contained the Code for Planning and Public Finance where he has included “contraband” transitional dispositions to continue the political persecution of the Isaias family and to promote the impunity of the administration of the companies.


Communications and Press Bulletins


1. Communication on the condemnatory sentence of March 13, 2014

Why did the Government convict the Isaias brothers?
Had they not been convicted it would have had to return the television stations, TC Television, Gamavision and CN3 and render accountability for more than a billion dollars in squandered businesses and assets.
2. Open letter to Dr. Gustavo Jaklh, President of the Judicature Council regarding due process violations in the Isaias case

The laws and Constitution of Ecuador grant express authority to the Judicature Council to suspend judges when a presumption exists that an illicit act has occurred and to penalize them if they commit inexcusable errors when applying the law. We have requested your intervention in the complaints and communications delivered to your office.
3. Public communication for the 5 year anniversary of the confiscation of the assets, businesses and media outlets pertaining to the brothers Roberto and William Isaias Dassum

The confiscation is part of an unjust confabulation that has squandered more than $800 million USD that lacks transparency and has no accountability as called for by law and the Constitution. Five years ago, a group of former government officials decreed a “banking holiday”, they fabricated a perverse confiscation of the assets pertaining to the Isaias and others claiming the existence of depositors harmed by our administration of Filanbanco. After this illegal confiscatory act they sought the protection of the National Constituent Assembly.
4. Explanatory communication on the Isaias Case requested by Roberto Isaias Dassum

"We have not hurt any depositor."
In the face of a government campaign, intending to justify the systematic abuse committed against us and certain press publications that are far from the truth, I must reiterate we have not hurt any depositor of Filanbanco during our management that concluded on 12/02/98 the day we handed over a fully functioning bank to the State.
5. Declaration made by the Isaias Brothers immediately after the condemnatory sentence issued by Judge Wilson Merino

Judge Wilson Merino
“This ruling is another example of the political persecution by the government of Rafael Correa, of the absence of justice and the lack of due process in Ecuador… Furthermore, the acts byJudge Merino – who also convicted the businessmen and journalists of the newspaper El Universo confirms that the Ecuadorian judicial system is just another branch run by President Correa…”
“We are politically persecuted and the sentence is destined to consolidate the confiscation of the television channels and important communication mediums... “

Attatchements & Documents


1. Report by Deloitte & Touche (Proof-34.pdf)
Report of the Application of Agreed Upon Procedures for the Identification of Adjustments that are required to be made upon the Assets, Contingencies, Provisions and Estimates of Interest and Social Benefits and the determination of losses till 12/02/98.
2. 07102013 SBS-2013-0719.pdf
Published in the Official Registry No. 687 dated 04/20/2012, was the Resolution JB-2012-2140 dated 04/02/2012 through which the Banking Board substituted chapter XV “the collection of asset losses of the financial institutions in liquidation”.
3. 072000B BALANCE SIB BOL200007B.pdf
Consolidation and Condensed Situation Balance of the Private Banking System till July/2000
4. 20042012 Auto de Pago Juicio 008-2012-UGEDEP.pdf
Proceeding of a Forced Administrative Collection, Payment Ruling against Roberto Isaias Dassum and others; because they were officers of Filanbanco at the time it was subjected to the restructuring or liquidation process they were ordered to pay $477,358,000 USD plus interest and legal costs.
5. 27042010 COM-SUP-INT-2010-070.pdf
After cross checking the accounts, assets as well as liabilities to determine the true balance of the accounts for the former Previsora dated 03/27/2010 they found a huge deficit of USD $68,148,897.35; items without supporting documents for USD $7,983,972.55; Order Accounts for US$ 91,124,267.90; totaling US$ 167,257,137.80; in the opinion of the Auditing Commission of the SBS it should be charged to the administrators and shareholders of the former Previsora International Bank.
6. 29062000 INFORME AGD-GG-2000-039.pdf
Technical report on the merger of Filanbanco and La Previsora Bank Analysis of various merger aspects; analysis conducted by a Government decision that intended on rescuing the State Bank to later privatize it and sell it to international financial institutions; in conclusion the amounts analyzed established that the merger process was less favorable for Filanbanco.
7. RESOL JB-2009-1427 21-09-2009.pdf
A change was made to Chapter XIV of the conclusion of the process of forced liquidation. When an institution in process of forced Liquidation registers liabilities greater than its assets and once the operations have ceased, the liquidator must conduct the accounting registry of the necessary provisions. Until 12/31/2009 the process of forced Liquidation was deemed to be concluded.

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