[June 12, 2014] |
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Itaú Added as a Defendant in Cartica's U.S. Federal Court Lawsuit to Enjoin the Closing of the Itaú Unibanco - CorpBanca Combination
NEW YORK --(Business Wire)--
Cartica Management, LLC yesterday amended its complaint in the matter of
Cartica v. CorpBanca, Saieh, et al. (Case No.: 14-CV-2258 (PKC)) to,
among other things, include Itaú Unibanco Holding S.A. (ITUB) and Banco
Itaú Chile (together, "Itaú") as Defendants along with CorpBanca S.A.
(BCA) and Álvaro Saieh, its controlling shareholder. Other Defendants
include CorpBanca's Directors, its Chief Executive Officer, and its
Chief Financial Officer; and Saieh's holding companies (together,
"CorpGroup"). The complaint alleges Saieh, Itaú, CorpBanca and the other
Defendants committed violations of anti-fraud provisions and disclosure
requirements of the United States Securities Exchange Act of 1934. The
complaint seeks to enjoin the closing of the proposed transaction. The
case is pending in the United States District Court of the Southern
District of New York.
Saieh, Itaú and CorpBanca are charged in the Amended Complaint with,
among other things, continuing to withhold material information, and
failing to correct material misstatements, even after Cartica filed its
Complaint identifying multiple violations of U.S. securities laws. For
example,
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CorpBanca's and Saieh's two filings since Cartica commenced its
lawsuit have been late and materially incomplete. First, a belated
20-F filing made by CorpBanca on May 15, 2014 provided incomplete and
inconsistent additional disclosures, leaving the overall disclosures
materially misleading. Second, on May 29, Saieh and CorpGroup filed a
Schedule 13D that by CorpGroup's own admissions in the Schedule should
have been filed more than five years ago. Furthermore, the belated
Schedule 13D failed to disclose that Saieh, Itaú, and CorpGroup had
formed a group to hold shares for the purpose of effecting a change in
control. The document also omitted any information regarding Saieh's,
CorpGroup's and Itaú's motivations for effecting a change-in-control
at CorpBanca - even though the provisions of Section 13(d) require
full and complete disclosures concerning, among other things, their
intentions, agreements and acts rlated to the change in control at
CorpBanca.
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Saieh, CorpBanca and the other Defendants materially misstated to the
market and their investors the size of the credit facility they
entered in January 2014. They initially disclosed to the market that
the credit facility was for US$950 million, and over the next four
months they reiterated the US$950 million figure. Then, following
Cartica's filing of a lawsuit and increased pressure for additional
disclosure, the Defendants' most recent May 2014 disclosures revealed
that the credit facility was for US$1.2 billion-a material
misstatement of US$250 million.
Based on the most recent material misstatements and omissions made by
Saieh, including the five-year delinquent and still-deficient Schedule
13D, it has become clear to Cartica that Itaú is actively working with
Saieh to close the transaction, a transaction being supported by fraud.
Cartica has therefore made the important decision to name Itaú as a
defendant in the amended complaint filed yesterday.
"Our initial complaint made clear that Itaú and the Saieh entities had
formed a group subject to the filing requirements of Section 13(d). We
reasonably thought that Itaú would respond by belatedly complying with
the law by jointly filing a 13D with the Saieh Group," said Cartica's
Managing Director for Corporate Governance Mike Lubrano. "Unfortunately,
Itaú decided to continue to flout U.S. securities law and regulations,
and so we added Itaú as an additional Defendant and have asked the court
to compel Itau to comply with US securities law."
"The Itaú Transaction should be enjoined so that the Boards of
CorpBanca, CorpGroup and Itaú, as well as the Boards of every other
potential acquirer, receive the unmistakable message that any
acquisition of CorpBanca must be fair and transparent," said Cartica
Managing Director Teresa Barger.
"Saieh's, Itaú's and CorpGroup's failure to provide material information
about this fraudulent deal is not mere oversight, it is a critical part
of the plan to pull off this wrongful transaction," Ms. Barger
continued. "Saieh, Itaú and CorpGroup cannot fulfill their disclosure
obligations without revealing to the public that they made a backroom
deal to secure short term liquidity, cash and long-term benefits for
Saieh and CorpGroup.
"The facts are that the piecemeal and delinquent disclosures remain
incomplete, and every new disclosure raises new issues or reveals
additional misstatements," Ms. Barger said. "CorpBanca, Saieh and Itaú
still have not disclosed many documents that would allow minority
shareholders to make informed decisions about the proposed combination.
Nor have they done anything to correct their omissions and
misrepresentations or to end this wrongful scheme. Simply put: Saieh and
the Defendants made or permitted misleading statements and omissions
that led to the Itaú Transaction on its current unfair and undervalued
terms, without CorpBanca's minority shareholders having the opportunity
to take any steps to protect their interests. Shareholders of
U.S.-listed companies deserve better."
About Cartica Management, LLC
Cartica Management, LLC is an alternative asset manager focused
exclusively on Emerging Markets. The core of Cartica's team worked
together in senior leadership positions at the World Bank Group's
International Finance Corporation. With assets under management in
excess of US$2 billion, Cartica's institutional client base includes
pension funds, endowments, and other international investors.
Cartica is headquartered in Washington, DC and is registered as an
investment adviser with the United States Securities and Exchange
Commission. For more information please refer to:
http://www.carticacapital.com
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