THE CASE / Evidence of innocence

Filanbanco bankrupt by corrupt state administration.


When the Isaías brothers handed over Filanbanco to the state on December 2, 1998, it was going through a liquidity crisis but it was not bankrupt. The bank was solvent and delivered fully operational. Several pieces of evidence prove it.

As an example, there is the official letter of November 25, 1998 from the Superintendency of Banks sent to the Central Bank, which certifies the financial situation of Grupo Financiero Filanbanco. It was state officials who looted it, squandered it, and bankrupted it three years later.

Filanbanco was so solid and solvent that in the first quarter of 2001, under state management alone, it made a profit of $ 130 million.

blog-post-image Filanbanco was the largest and most solvent bank of the last century
Filanbanco had half a million clients and managed up to 500 million dollars in international loans. It managed 40% of the country's foreign trade. Industries such as floriculture, banana and shrimp were promoted with the vision, support and credits of Filanbanco.

As evidenced by the balance sheets and reports delivered to the Superintendency of Banks and the Central Bank of Ecuador, when Filanbanco was transferred to the Deposit Guarantee Agency (AGD) it had solidity and solvency. In the first year of state administration, with the same assets and liabilities left by the former shareholders and after the liquidity crisis, Filanbanco was once again the most profitable in the country.

blog-post-image Filanbanco turned into savior of bankrupt banks
During Gustavo Noboa's government, political interests infiltrated in the AGD imposed on Filanbanco the “mandatory” bailout of several banks. Among them, four entities under suspicion for their relationships with power: Cofiec (Falconí-Avellán), Previsora ​​(Guerrero Ferber brothers), Pacífico (Laniado) and Progreso (Aspiazu-Seminario).

blog-post-image Losses of 895 million dollars in State Filanbanco
Between the end of 1999 and the bankruptcy of Filanbanco in 2002; the bank's balance sheets, reports from the Superintendency of Banks and international advisers, reports from auditing firms revealed that between April and December 2000, there was a serious deterioration in the bank's financial situation. During this period, Filanbanco lost its liquidity and solvency. A report from the Superintendency of Banks shows that state Filanbanco generated losses of 895 million dollars during the administration of the entity by the government at that time.

blog-post-image The detail of the losses in state administration
The figures are overwhelming: In operations with Bonds, the state Filanbanco lost 201.1 million dollars. In negotiations with CDRs, the loss was 112.4 million dollars, due to rescheduling of deposit maturities from the freezing by Executive Decree, in which Filanbanco was forced to receive CDRs as payment of the debts of its clients. (Some of these CDRs were paid in advance and in cash to influential politicians and authorities such as Juan Falconí).

The bad administration of credits supposed losses of 117.5 million dollars; merger with Previsora, Filanbanco lost 108 million dollars; sale of goods, 17.7 million dollars; and finally, due to provisions created for lack of management in the collection of the portfolio, 338.5 million dollars were lost.


The process against the former administrators of Filanbanco began in June 2000, that is, a year and a half after they handed over the bank to the State. Almost all the auditing firms operating in Ecuador passed through Filanbanco and in their reports they ratified the good condition in which the former administrators handed over the bank to the AGD.

blog-post-image The ECB's credits to Filanbanco were correctly used and destined

On December 5, 2000, the state Filanbanco administered by the AGD sent a written certification to the President of the Supreme Court of Justice confirming the proper use and destination of the credits.

The experts Fernando Castillo and Elvira Pino, appointed by the highest judicial authority, also certified the correct use and destination of said credits. Based on this evidence, Attorney General Mariana Yépez had to acknowledge her error in the accusation of abuse of public funds and issued the opinion that confirmed that there was no bank embezzlement. The Prosecutor limited herself to accusing the defendants for crimes in the handling of balances, the same ones that were later distorted with evidence.

The accusations about the diversion of credits to companies of the Isaías group were never proven. The Supreme Court of Justice three times asked the Superintendency of Banks at that time to prove, expand and specify such accusations, but said body never did. The Court consulted the US banks that the Superintendency mentioned as beneficiaries of the ECB funds, and those banks certified that they never received such funds.

By not having a legal formula to incriminate the Isaías brothers, the powerful on duty used false pretexts to force the accusation and cover their interests. They only wanted to obtain an accusation at any cost, even if there is no evidence to support it.


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