Published: Thu, June 08, 2017
Worldwide | By Gretchen Simon

Goldman Sachs USD2.8 Bn Venezuelan bonds purchase creates uproar

Protesters yesterday vented their fury at Goldman Sachs over the U.S. banking giant's decision to buy US$2.8 billion (RM11.99 billion) in Venezuelan government bonds, saying the move gives a lifeline to President Nicolas Maduro.

Venezuela's opposition has been urging Wall Street banks not to throw a financial lifeline to Maduro, who's faced nearly two months of public protests while cutting imports of food and medicine to conserve cash and continue bond payments.

In a scathing letter to Goldman CEO Lloyd Blankfein, Julio Borges called the deal an "outrage" that provides a "lifeline to [an] authoritarian regime that is systematically violating the human rights of Venezuelans". "I also intend to recommend any future democratic government of Venezuela not recognize or pay these bonds", the letter said.

Bonds issued by Venezuela's national oil company, Petróleos de Venezuela, or Pdvsa, "have attracted some of world's most sophisticated investors", the New York Times explained.

It shouldn't come as a surprise that anti-Maduro forces might resent a bank stepping in to prop up the market for Venezuelan bonds at such a moment.

About two dozen protesters picketed outside the headquarters of Goldman Sachs in lower Manhattan, New York, on Tuesday over alleged transactions between the investment bank and the Venezuelan government.

The comments mark one of the most aggressive critiques of the government of Venezuela's socialist President Nicolas Maduro to date from Videgaray, the former finance minister and close confidant of President Enrique Pena Nieto.

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"In response, President Nicolás Maduro has responded with an iron fist".

"A lot of people have had their eyes on Venezuelan assets, including these bonds", said Francisco Rodriguez, chief economist at Torino Capital.

In his stead, he sent Tom Shannon, the US undersecretary of state for political affairs, who urged Venezuela to stay in the group and defended its right to try to resolve the crisis.

"What happened is that the Venezuelan Treasury owned some bonds issued by PDVSA, the national oil company".

The declaration also included a demand that the Venezuelan government shelve plans for the creation of a citizens' assembly to rewrite the constitution.

"Tonight, millions of venezuelans will go to bed hungry and without the possibility of obtaining the medicines that they need, or exhausted and bloody following their legitimate peaceful protests for democracy and the right to vote, as victims of a brutal regime that Goldman Sachs made a decision to support", he continued.

"We recognise that the situation is complex and evolving and Venezuela is in crisis. We agree that life there has to get better, and we made the investment in part because we believe it will", the bank added.

"The total of 69 people includes those who have died as a result of looting and those who have died as result of accidents on the barricades", Romero said, as quoted by Venezuela's El Cooperante newspaper.

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