Mérida, November 15th 2011 (Venezuelanalysis.com) – Nelson Mezerhane, president of Banco Federal, which the Venezuelan government expropriated last year for failing to have minimum liquid assets, is suing the government through a US court, claiming the bank was “illegally seized for political reasons”.
Venezuelan state attorney Carlos Escarra responded to the case, saying that the expropriation didn’t affect Mezerhane’s property, “We [the government] on the other hand, we were left lacking for the actions the state has had to take.”
The government has almost finished paying off account holders of the bank, as well as account holders of other banks that have been expropriated. The nationalisations of Banco Federal, Canarias, Bolivar, Banpro, Casapropia, and Bancoro left 1.8 million account holders who were owed money. Just eleven days after the expropriation of Banco Federal the government released BsF 2.2 billion in deposits (US$ 488 million) and yesterday paid another instalment of Bs 112 million (US$ 26 million) to account holders.
Mezerhane fled Venezuela in June last year after the expropriation, pre-empting a travel prohibition, and is now living in Florida, U.S. He was also a minority shareholder of opposition news channel Globovision.
The Venezuelan government expropriated Banco Federal for failing to comply with minimum liquid asset provisions and productive sector investment quotas established in the banking law. The bank held only BsF 920 million in reserves for BsF 3.5 billion of deposits.
Mezerhane, in going to court, has told press the government expropriated the bank because he refused to surrender his 20% stake in Globovision, and his lawyers have said the expropriation was politically motivated and there was no “public purpose”.
After the expropriation, through Mezerhane’s combined shares, the government was able to put one of its representatives onto the Globovision’s board. Mezerhane’s shares however, through his bank and one other small company amounted to 25.8%, meaning the government’s one representative isn’t able to control Globovision decisions.
According to Bloomberg, it isn’t certain that Mezerhane could collect any damages if a US judge were to award them. In similar cases, lawyers usually go after a foreign country’s assets, such as bank deposits, that are held within U.S. borders.