Colombian Corporate Watchdog Steps In Amid Rumors of Sale of Venezuela-owned Monómeros

Colombian law allows the Corporation Superintendency to intervene when an enterprise is in a critical situation.
Monómeros is currently the largest fertilizer production company in Colombia. (monomerossa / Meta)

Mexico City, Mexico, November 19, 2024 (venezuelanalysis.com) – Colombia’s corporate watchdog has intervened to oversee Monómeros, the Venezuelan state-owned agrochemical company, following growing concerns over a rumored sale that Colombian President Gustavo Petro says could disrupt the agricultural sector.

Colombia’s Corporation Superintendency, the powerful oversight agency, previously assumed control of the company in January 2022, when the Monómeros was under the management of the Venezuelan opposition and a series of scandals put the company at the risk of insolvency. 

Colombian law allows the Corporation Superintendency to employ a series of escalating levels of intervention when an enterprise is in a critical “judicial, accounting, economic or administrative” situation.

“In the face of potential risks that affect the general interest, our duty is to act promptly, aware of the importance that corporations have for the national economy and in the particular case of Monómeros, due to its relevance for agriculture, food sovereignty and Colombian farmers,” said Billy Escobar Pérez, the head of the watchdog agency.

Petro strongly opposes privatization plans reportedly floated by Venezuelan Industry Minister Alex Saab. A report from Spanish newspaper El País indicated that upon taking office and returning control of the company to the Venezuelan government, the Colombian president expressed his interest in acquiring a 51 percent stake but did not receive a reply from the Venezuelan government. 

Founded as a joint venture between Venezuela and Colombia, Monómeros became fully owned by Venezuela’s state-owned petrochemical company Pequiven in 2006, when the Chávez government bought out shares from Ecopetrol and Dutch firm Koninklijke DSM to become the sole proprietor of the firm.

The watchdog’s involvement is seen as a protective measure to ensure Monómeros continues to support Colombian farmers. The company, a subsidiary of Pequiven, plays a critical role in supplying fertilizer and other agrochemicals used by coffee, potato and palm oil production and stabilizing agricultural input prices, which directly impacts rural livelihoods. 

At issue is also the potential buyer, rumored to be Nitron Group, a US-based trader specialized in fertilizer products. Nitron Group is said to be the number 2 distributor of agrochemical inputs in the world. An acquisition of Monómeros would give it further power to set prices in the fertilizer market. Monómeros is currently the largest fertilizer production company in Colombia.

Venezuelan President Nicolás Maduro’s effort to sell Monómeros for an estimated US $300 million appears motivated by his government’s efforts to stave off further sanctions against the company ahead of Donald Trump’s inauguration in January. 

The agrochemical company currently operates under sanctions waivers issued by the US Treasury Department which are set to expire in mid-2025. However, those exemptions could be lifted should Trump opt to impose the full scope of sanctions on Venezuela as he did during his first term.

Rumors of a sale first surfaced in March, with Colombian state-owned oil firm Ecopetrol cited as a potential buyer, though the company has denied involvement. Last week, the Petro administration was reported to be searching for financing avenues to acquire the company. It is unclear whether it would be a total purchase of Monómeros or just a majority stake.

Edited by Ricardo Vaz in Caracas.