Costa Rica raids banks in Chinese cement financing case

Costa Rican authorities carried out raids at the offices of Banco Popular (BP), Banco Nacional (BNCR) and Banco Nacional's employee association (Asebanacio) Friday morning to find evidence related to loans approved by BP to a Chinese cement import business, run by high-profile entrepreneur Juan Carlos Bolaños.

The action, ordered by the attorney general's office, represents ongoing investigations that began in July 2017 at state-owned bank Banco de Costa Rica and BP, building to a public and investor uproar in September with discoveries surrounding a US$38.9mn loan tied to Bolaños and Sinocem Costa Rica for the import of Chinese cement in 2016, though records show only US$9.7mn in actual product arrived in the controversial transaction.

According to a statement released to local media, Friday's raids at BNCR and Asebanacio were carried out in the belief that investigators might find documentation related to approval of suspicious loans at BP.

"The documents of interest of the attorney general's office at the Banco Nacional and in Asebanacio are related to the processing of two letters of credit requested by Bolaños for the importation of 20,000 tons of cement by May 2016, each for US$900,000," reported Costa Rica media outlet La Nación.

"According to the attorney general, that date is the same one, apparently, as the arrival of cargo for which the Banco Popular and the Banco de Costa Rica had already granted and deposited a loan to the Bolaños, which was destined according to the applicant for the importation of this material," said the AG's office.

The office also said they entered BP's offices to look for evidence in relation to the appraisal of property Bolaños used to guarantee the loan. The property in question was reviewed by a licensed appraiser but, only a week later, re-appraised under orders from Bolaños and revalued for an additional US$1.7mn.

The attorney general's forensic engineering department later evaluated the property at half that of the lower, first appraisal, according to the report.