Operator News
Chile – Chile’s President embroiled in irregularity claims over Enjoy licence awards
By Phil - 24 March 2021
A journalist in Chile claims to have seen leaked information linking President Sebastián Piñera with alleged ‘irregularities’ concerning one of the country’s leading casino operator’s Enjoy.
Journalist Alejandra Matus claims to have read information contained in an investigation led by Chile’s investigative commission of the Chamber of Deputies linking the President and Enjoy casinos to several irregularities. The controversy has seen opposition leaders since demand the resignation of the boss of the country’s regulator Superintendent of Casinos Vivien Villagrán.
In the TV programme ‘Mentiras Verdaderas’ which translates as ‘True Lies’, Ms Matus highlighted that the President had his savings managed by two companies who were also guaranteeing Enjoy’s debt, a company that the journalist claims has been ‘virtually bankrupt since 2017’ yet has been awarded four new gaming licences and been able to buy one of Latina America’s leading casinos in the Conrad of Uruguay in Punta del Este.
The journalist’s accusations were aired on national TV where she alleged: “There were conflicts of interest between President Sebastián Piñera and the bidding and the extension of permits to extend the construction of casinos tendered to Enjoy SA.”
“The investigation clearly shows that two of the companies in which President Piñera has managed his fortune, BTG Pactual and Moneda Asset, are compromised, either by guaranteeing certificates or because they are guaranteeing Enjoy’s debt, with Enjoy remaining afloat even though it has been virtually bankrupt since 2017. Instead of safeguarding the public interest in the control of Enjoy casinos, it adopted numerous measures to favour it and prevent the ballots that guaranteed their unfulfilled promises from being executed. The report is now in the hands of the Comptroller’s Office.”
She added: “Does President Sebastián Piñera have interests involved in the delicate situation that the Martínez family is going through, owner of the Enjoy casinos? The answer is yes. There is a direct line between the economic interests of President Sebastián Piñera and Enjoy, manifested through BTG Pactual, an entity that manages $2m from its blind trust. Meanwhile, the President’s children commissioned the same company to administer $247m of its assets in Inversiones Santa Cecilia, the family holding company.”
In the program, she questioned the conduct of SJC Chief Vivien Villagrán saying that the beneficial treatment of Enjoy ‘directly benefits the companies that administer the trust of President Piñera, whose interests would be damaged if Enjoy SA falls apart.’
The investigation focused on the insolvency of the Enjoy group and meetings that took place between May and December 2020. In mid-2020, Enjoy reached a reorganisation agreement with its creditors, to transfer some of its $465m of debt into bonds, as well as payments with defined terms to banks and suppliers. It also looked at the extended deadlines offered to Enjoy for casinos it was to take control of in Pucón, Puerto Varas, Coquimbo and Viña del Mar. By law, the winning casino operators were granted two years from the award of the licence to construct the venues and launch operations but, by law, they could request a one-time, one year extension if they could provide ‘well-founded reasons.’
Following the social unrest in Chile, Enjoy requested the extension in February 28, 2020, prior to the pandemic. It then requested and was granted another one following the pandemic. The casinos should have opened in June 2020.
Deputy Rodrigo González, who led the investigative commission of the case, said: “The sudden reorganisation of Enjoy raised great concern. I invited several deputies to form an investigative commission. What was the situation that had generated the insolvency disaster of this company and how was this going to affect the municipal interests of the Municipality of Viña, but also of the municipalities of Pucón, Puerto Varas and Coquimbo?”
“The reorganisation [of Enjoy] meant that the revenues would no longer reach the municipalities, nor the regional governments and the treasury, and therefore there was going to be a decline causing very great damage to various regions of the country. Resources that belong to the public treasury, are fiscal resources. Casino gaming is prohibited in Chile and is only allowed under legal authorisation with licenses or concessions that are given by virtue of the law.”
He added: “The investigation gave birth, but with crystal clarity, to the theory that Enjoy’s bankruptcy had no relationship with the pandemic or with the social outbreak. The Superintendency de Casinos had not sufficiently investigated this or rather had not wanted to investigate this, or the situation in which the company was handed over the concessions of the four or five municipal casinos in 2018 and subsequently to have authorised the purchase of two casinos: one in Los Angeles, one in San Antonio.”
Mr. González went on to question the Superintendency’s relationship with Enjoy claiming it was ‘extremely concessive and permissive.’ He questioned how it could award casino licenses to a virtually bankrupt operator. He called some of Enjoy’s project offers ‘reckless’, adding that it was impossible for the company to deliver what they had promised and that their only intention was for Enjoy to seemingly have a majority share of the Chilean casino market.
Mr. González said: “They excluded competitors for offers [from Enjoy] that according to any economic calculation, they [Enjoy] weren’t going to be able to finance themselves. They took advantage of that time to buy the leading casino in Latin America, the Conrad of Uruguay in Punta del Este.”
Following the airing of the TV program, the Minister Secretary General of the Government Jaime Bellolio said: “President Piñera does not have nor has he had any type of relationship of any nature with Enjoy or with any casino, therefore all the accusations that have been done in that sense, have no foundation. The casinos have obligations, they have to initiate works and as a result of the pandemic they could not do it and that is a decision made, not by the government, but by the Superintendency of Casinos.”
Enjoy stated: “Regarding the political speculation that has circulated in the national media related to our company, Enjoy reiterates how unfounded and speculative all these accusations are. We understand that in an electoral period context such as the current one, there may be political intentions behind the comments and rumors spilled in debates on social networks and the media about which we cannot take charge. We regret that for these political purposes there is a willingness to harm a Chilean company, with more than 45 years of history and its thousands of workers.”
It added: “Regarding the report of the Chamber of Deputies, it is important to clarify that despite the fact that Enjoy formally requested to appear before that investigative commission in order to clarify doubts and deny gross errors, the commission refused to receive us, which transforms the report into a completely biased document, which shows a serious violation of the duties of objectivity, transparency, due process and seriousness.”
“As a company we have always acted with the most absolute transparency, adherence to the rules, and undeniable respect for the institutionality. Today our focus is on resuming our operations and projects in the current difficult context of the pandemic, on continuing to employ thousands of people in the country and on once again being a pole of economic development for the regions in which we have a presence.”
