Piñera Starts Cashing In His ChipsFebruary 17, 2010
Chilean President-elect Sebastian Piñera offered a glimpse Tuesday of just how deep his pockets stretch, selling one of his relatively minor investments – a nearly 10 percent stake in a posh Santiago hospital – for a cool US$37 million.
The almost 800,000 shares the politico-tycoon unloaded are now in the hands of an investment firm called Celfin Capital, which made the purchase on behalf of a yet-to-be- revealed third party. Celfin Capital outbid Larrain Vial.
Piñera, the first conservative to win a presidential election here in more than 50 years, has long promised to cash out on his many investments before March 11, when he officially replaces outgoing President Michelle Bachelet. Backers point to this week’s sale of Clinica Las Condes stock to show the 60-year-old businessman is finally making good on that pledge.
Critics, however, say Piñera has already taken too long to sever his many business ties and has, as a result, profited personally from his Jan. 17 presidential win over Eduardo Frei. Piñera’s most valuable holding is a majority (26 percent) stake in LAN, Chile’s leading airline. The president-elect holds most of those stocks via an investment firm called Axxion, which Piñera owns outright. In recent months the value of Axxion stocks has surged, up from 8.66 pesos on Dec. 10, the Friday before Piñera’s victory in the first-round presidential election, to 23.70 pesos currently. Axxion agreed two weeks ago to go ahead and sell the 19 percent stake in holds in LAN. With less than three weeks before Piñera takes office, however, that sale has yet to go through.
Nor has the president-elect cut his ties with Chilevision, one of the country’s leading television stations, and ColoColo, Chile’s top football club. Rather than sell the profitable network, Piñera says he will place it in a blind trust. According to news reports, the trust will be managed by a group called Fundación Cultura y Sociedad, a spinoff of the Fundación Futuro y Sociedad over which Piñera already presides. Critics say the trust will be more “one-eyed” than blind. The president-elect plans simply to keep his 13 percent stake in perennial powerhouse ColoColo.
Concerns over potential conflicts of interest will likely follow the new government well after it takes office next month. Like Piñera, the members of his recently named cabinet almost all hail from business backgrounds linking them to many of the nation’s largest corporations and economic groups. Chile’s new foreign affairs minister, Alfredo Moreno, was a director with retail giant Falabella prior to his cabinet nomination. The soon-to-be education minister, Joaquin Lavin, is a founder and – until recently – part owner of the private Universidad del Desarrollo. And prior to his appointment as health minister, Jaime Manalich worked as a director of Clinica Las Condes – the same private hospital that just earned Piñera close to US$40 million.
The president-elect’s tycoon status has drawn him comparisons to Italian Prime Minister Silvio Berlusconi. Both appear on the most recent version of Forbes Magazine’s “The World’s Most Powerful Billionaires” list, published in late January. Piñera figured 15th on the list, ahead of people like Steve Jobs, founder and CEO of Apple Computers, and media mogul Rupert Murdoch. New York City Mayor Michael Bloomberg and Berlusconi hold the top two spots. Forbes estimates Piñera’s total worth at roughly US$2 billion.
Recently published details about Piñera’s campaign spending suggest that in politics, it pays to be rich. According to the Servicio Electoral, the president-elect spent more than his three rivals – Frei, Marco Enriquez-Ominami and Jorge Arrate, the far-left fourth place finisher – combined. Piñera shelled out US$9.59 million dollars, just US$5,660 under the legal limit. Together, Frei (US$5.98 million), Enriquez-Ominami (US$2.84 million), and Arrate (US$566,000) spent US$9.1 million. A hefty portion of Pinera’s campaign spending, US$2.07 million (21.5 percent), came out of his own pocket.