The FX Report

Argentina Business Association (AEA), one of the largest in the country, warned that the expropriation of oil company Repsol YPF to the Spanish group should be “an exceptional event,” because otherwise there will be a drop in foreign direct investment.

Instead, employers lined up in the Union Industrial Argentina (UIA) supported the decision of the government of Cristina Fernandez because they believe favors the country has a state policy on hydrocarbons.

The positions of the two largest Argentine business groups met five days after the Executive Argentine YPF announced the intervention and the presentation of a bill to expropriate 51 percent of the shares owned oil company Repsol.

“In a modern democratic society, a decisive role of the state is to ensure a predictable framework of rules and respect for contracts that allow private companies to develop investment, create jobs, innovate and win foreign markets” highlights the AEA in a statement.

“In this context, the expropriation of a private company should be considered an exception made,” says the association.

According to the entity, who chairs Jaime Campos, is of “vital importance” that “to proceed to the expropriation is made in strict compliance with the Constitution of Argentina that Article 17 requires that it be for a public purpose described by a law and previously compensated” .

The AEA said that Argentina is part of “an international community of nations in the prevailing rules, procedures and behaviors that must be respected.”

“Not doing so will mean a drop in foreign direct investment. In addition, for Argentine companies will be increased difficulties of access to international financing and marketing their products and services in the markets of other countries,” he added.

For his part, told Radio 10 in Buenos Aires, the president of the UIA, Jose Ignacio de Mendiguren supported the formal decision on YPF.

“It indicates that we have in the direction of state policy,” said De Mendiguren, who felt that the process has been opened in relation to oil “represents a challenge for the coming years.”

However, the leader said that his organization is “different approaches to listen” and said his ambition is to have “Petrobras Argentina,” referring to the model of the Brazilian state.

The Brazilian Finance Minister Guido Mantega, today criticized the “reluctance” of European countries to review the system of quotas in the IMF noted that “current balance is deeply damaging to the credibility” of the Fund.

As an example, Mantega stressed that the share of Luxembourg is higher than that of Argentina or South Africa or Belgium superior to Indonesia or Nigeria.

“The reluctance of some countries to implement comprehensive reform agreements of the formula of the quota system is deeply damaging to the institution and the credibility of these countries,” he said in his speech at the Monetary and Financial Committee of the IMF in Washington .

Mantega insisted their calls to advance the “slow and limited” reform process to be finalized for the next annual meeting of the International Monetary Fund in Tokyo in October this year in order to move to a more significant amendment in 2013.

“It is often repeated that reforms in the quotas are crucial to the legitimacy and effectiveness of the Fund. The mere ritual repetition of such statements is not enough,” said the Brazilian minister.

On the other hand, expressed his concern about the fiscal consolidation in many advanced economies is “a drag on growth.”

It has encouraged countries ‘fiscal space’, such as Germany and Northern Europe, to take “stimulus” that “not only help to global demand but will also facilitate the rebalancing within the euro zone.”

Attacked also monetary policies “ultraexpansivas” in some developed economies affect emerging markets like Brazil.

In this sense, Mantega reiterated that his government will continue to implement measures that “deems necessary” to contain excessive and volatile flows of capital with prudent macroeconomic policies and controls.

“Brazil is opposed to any code of conduct or guidelines that attempt to constrain international policy responses to these emerging markets,” he concluyido.

During his speech, Mantega made no reference to the capital increase of 430,000 million to the IMF approved yesterday by the G20.

Previously, in a meeting with reporters on the sidelines of the spring meetings of the Fund, the Brazilian minister expressed his willingness to strengthen the IMF’s resources but regretted that “some countries have more enthusiasm to request money to reform the quota system” .

Finally, Brazil agreed to collaborate in this increase, but avoided giving a specific figure.

A tumultuous meeting of shareholders of Olympus on Friday approved the appointment of a new board of 11 members that task will take the group of cameras of the delicate situation that is a result of a huge financial scandal.

Hiroyuki Sasa, optical technology specialist who came to Olympus for thirty years, was named president of the group and Yasuyuki Kimoto, former director of the bank Sumitomo Mitsui CEO.

Also, the general assembly of shareholders convened for the occasion elected new board members.

“The initial proposal (composition board) has been approved,” said outgoing President Shuichi Takayama, after three hours of meeting at which not spared criticism.

A committee for internal reform had been mandated by the old board to amend the governing bodies and end collusion camouflage that allowed more than 130,000 million yen (1,300 million euros) in losses for decades.

“We, members of the board, we sincerely and deeply apologize to shareholders caused by concerns,” said Shuichi Takayama president, before resigning along with members of the board.

Other former leaders, indicted for embezzlement, had resigned all his positions in recent months. His fate is now in the hands of justice.

“Our company will make radical changes to regain the confidence of all as soon as possible,” said Takayama.

It was feared that the consensus for the election of the new board was not easy given the opposition of many investors to the appointment of some candidates, considered too close to the banks.

However, these banks and other large Japanese shareholders gave their support to candidates. A candidate for the CEO position comes from the banking environment as one of the administrators.

The former British Michael Woodford fired for exposing the scandal, which has no office in Olympus but is a shareholder, said he would vote against.

The subject, who at one time harbored ambitions to return to the group, was particularly fierce on Friday with the old and new leaders.

“Embarrassing,” Woodford was repeated in mid-October evicted by military direction for being too curious about fraudulent financial transactions made by their predecessors and colleagues.

At the end of the meeting announced to reporters that going to go to court to overturn the decision of this assembly because “management has failed to respond to questions from shareholders about the financial accounts” group.

Nearly a thousand shareholders, a record for Olympus, attended this meeting extraordinaira while investigations into the embezzlement are still in Japan, the U.S. and Britain.

The new managers have a difficult task to restore the house nonagenarian, the world of endoscopes, whose image and its finances have been badly damaged.