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Economy

Central Bank decrees extrajudicial liquidation of Simpala group companies

Central Bank of Brazil (BC). Adriano Machado/ Reuters The Central Bank of Brazil (BC) decreed yet another extrajudicial liquidation this Friday (14). This time, the affected institutions were Simpala Nuncadora e Administradora de...

By 365 Breaking News Editorial Team 2 min read
Central Bank decrees extrajudicial liquidation of Simpala group companies
365 Summary

Extrajudicial liquidation is normally adopted when the institution is unable to continue operating and is closed, under the supervision of the BC, without going through a traditional recovery process. Send it to g1 According to the Central Bank, the decision was taken because the companies' financial situation had deteriorated and because serious violations...

  • Send it to g1 According to the Central Bank, the decision was taken because the companies' financial situation had deteriorated and because serious violations of the rules that regulate...
  • The BC, however, did not provide further details about what these violations were.
  • The body also stated that there was a risk for creditors without specific guarantees, known in the market as unsecured creditors.

Editorial reading aid based only on information contained in this story and its identified source.

Central Bank of Brazil (BC). Adriano Machado/ Reuters The Central Bank of Brazil (BC) decreed yet another extrajudicial liquidation this Friday (14). This time, the affected institutions were Simpala Nuncadora e Administradora de Consórcios and Simpala S.A. Crédito, Financiamento e Investimento, both based in Porto Alegre, in Rio Grande do Sul (RS). Extrajudicial liquidation is normally adopted when the institution is unable to continue operating and is closed, under the supervision of the BC, without going through a traditional recovery process. ??Do you have any reporting suggestions? Send it to g1 According to the Central Bank, the decision was taken because the companies' financial situation had deteriorated and because serious violations of the rules that regulate their activities were identified. The BC, however, did not provide further details about what these violations were.

The body also stated that there was a risk for creditors without specific guarantees, known in the market as unsecured creditors. Despite the intervention, the BC highlighted that the two companies have a small share in their respective markets. The consortium administrator accounts for around 0.1% of the country's active consortium members, while the finance company held 0.004% of the national financial system's assets in June this year. In the case of finance companies, deposits and investments covered by the Credit Guarantee Fund (FGC) continue to be protected within the limits established by the fund. Understand what the FGC is The BC also informed that it will continue to investigate who were the people responsible for the problems that led to the liquidation of the companies, investigating whether there was non-compliance with laws or regulatory standards. "The result of the investigations may lead to the application of administrative sanctioning measures and communications to the competent authorities", stated the BC in a note released this Friday (14). By law, the assets of the controlling shareholders and former administrators of the institutions become unavailable once the liquidation is declared. *This report is being updated