We are writing to you from an Uruguayan prison, where we have just completed our seventh week
Leadgate private equity firm founder’s in February 2014 Letter to Investors.
In 2013 three Argentine businessmen were imprisoned without trial by a Uruguayan court for their role in the collapse of the nation’s flagship airline, Pluna. The chief executive, Matias Campiani, was set free on 22nd May 2015; 522 days after being imprisoned but not charged.
They had invested in Uruguay before but their problems began in 2007 when their joint owned private equity firm, Leadgate, bought a controlling stake in Pluna. This investment was ultimately unsuccessful and the airline was renationalised in 2012 and then quickly liquidated. Leadgate was also liquidated and the three founders left the country.
However, in 2013 Campiani and his two Argentinian co-founders Arturo Alvarez-Demalde and Sebastian Hirsch were recalled to Uruguay over accusations of fraud. The three were arrested without a formal charge and imprisoned by the Uruguayan government, headed by the anti-capitalist José Mujica.
Alvare-Demalde and Hirsch were released relatively quickly but Campiani remained in prison until on May 14th 2015 The New York Times published an article; ‘An Investment Airline in Uruguay Becomes a Catch-22’. This drew international attention to the case and he was released on May 22nd.
This quick response can be attributed to the election of Tabaré Vázquez as President of Uruguay. Vázquez has more moderate policies than Mujica and had been in power when Leadgate bought Pluna in 2007. His re-election should reopen the country to foreign investment.
Uruguay remains an attractive prospect for investment, foreign investors receive the same rights as local investors. Santander Investing claims that Uruguay will remain stable despite investment slowdowns in Argentina and Brazil.
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