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Ecuador: Noboa, between a rock and a hard place

For the past six years, the Noboa Group exported bananas through at least four companies that make up their business empire. The Noboa Banana Exporting Company (EBN) stopped making shipments since 2010. The Continental Banana Company (Banaconti) exported until 2011. Last January, this company was replaced by Gitzycorp SA for only a month, and in February Truisfruit SA started to export.

The group led by businessman and politician Alvaro Noboa, ranks in second position, according to statistics from the Association of Banana Exporters of Ecuador (AEBE).

The carousel of companies began months after the Internal Revenue Service (IRS) notified EBN in the final minutes of the audit, a difference in respect of Tax Income (IR) of USD 49.1 million, for 2005.

The notification was executed in April of 2009, but a month later the company filed administrative claims. From there on a series of legal incidents (upgrades, requests for annulment, appeal, objection, etc.) were generated. In total 33 actions, according to SRI.

But last Friday, Carlos Marx Carrasco, director of SRI, announced that, as judges of coercive measures, they applied precautionary measures. Those measures included withholding funds and present and future credits; prohibition to alienate shares,
intangible assets and property goods, and the hijacking of land, air and sea vehicles. All this rests with EBN, companies that were linked and against Alvaro Noboa. This last one also has a ban on leaving the country.

Although by the time the measure was enacted, the employer was in U.S. Pablo Guevara, an expert on tax matters and associate of Fides Buró, explained that "the tax authorities may use the means established by law to exercise the action of tax
collection". He also noted that the Tax Code allows incorporation of precautionary measures in that payment slip, so that the creditor can secure the credit. These can be expanded. "Beyond it being fair or unfair, the proceedings, are legal," said Guevara.


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