SQM fertilizer, producer of specialty fertilizers and inorganic industrial chemicals headquartered in Chile, has recently fired its chief executive officer, Patricio Contesse, after he was reported to have been involved in an election campaign financing scandal that involved politicians and businessmen with close ties to the 1973-1990 dictatorship of Augusto Pinochet. Mr Contesse’s contract was terminated after he had spent more than 25 years with the company. SQM, which has the rights to some of the largest reserves of lithium and nitrates in the world, moreover said that it would voluntarily provide its taxation documents for the last six years to the Chilean internal service. The authorities had requested the access to the documentation earlier but Mr Contesse tried to block the move.
Chilean authorities are investigating whether the money from SQM was channeled illicitly to fund electoral campaigns for the Chile’s biggest conservative party, Independent Democratic Union (UDI). UDI is a part of a right wing coalition with 44 seats in the lower house of the Chilean parliament and its chief resigned on March 11. UDI’s opposition is the left wing coalition of President Michelle Bachelet having 67 seats.
The scandal has outraged Chileans who are proud of being one of the most investor-friendly and least corrupt countries in Latin America. The scandal moreover involved the owners of the financial firm Banco Penta, who have already been charged with tax evasion and bribery. Prosecutors claim that they already have the proof that Penta’s owners used fake receipts to illegally finance the campaign. It was also announced that the new CEO of the company would be Patricio de Solminihac – a move that has been embraced by brokers at BanChile – who himself stressed that his appointment is “a first step towards confronting market worries linked to the company’s corporate governance.”