Corfo strikes US$5mn deal with Scotiabank

Monday, April 5, 2004

The Chilean government's industry development arm Corfo has reached an out of court settlement with Canada's Scotiabank (NYSE: BNS) as part of the state agency's ongoing push to recover stolen funds in the Inverlink case, Corfo said in a press release.

Scotiabank has agreed to pay Corfo a total of 3bn pesos (around US$5mn), bringing to an end various months of negotiations centered on alleged illegal transactions between Inverlink and the Canadian bank's Chilean stock brokerage unit.

Corfo reached a similar out of court settlement with Pine Bank in March when the US bank agreed to pay Corfo a total of US$4.2mn to compensate for allegedly illegal dealings between Inverlink and Pine Bank executive Alberto Colón.

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The Inverlink affair has been one of the biggest financial scandals in Chile's history. The now defunct financial group is under investigation in relation to the theft of tens of millions of dollars of deposits from Corfo as well as fraud at the country's central bank.

According to Corfo, the disappearance of funds from the agency's vaults could only have taken place with the participation and/or collusion of Inverlink officials and agents from the local stock exchange.

Inverlink's subsidiaries operated in the areas of healthcare, pension fund management, life insurance, and equity trading. The group collapsed last year.