Chile president under fire over bank loan to son

SANTIAGO - President Michelle Bachelet has come under fire from opponents after local media reported her son secured a bank loan from one of the country’s richest men.

Que Pasa magazine reported that Banco de Chile loaned $10 million (6.5 billion Chilean pesos) to a company owned by the president’s son Sebastian Davalos and his wife Natalia Compagnon, after the couple met in November 2013 with Andronico Luksic, the bank’s deputy chairman and a major shareholder.

The money was used by Exportadora y de Gestión Caval Limitada to finance a property deal near the city of Rancagua, 56 miles (90 kilometers) south of Santiago.

The Luksic are among Chile’s richest families with stakes in interests, railroads, mining, brewing as well as financial services.

The loan was finally granted in December 2013, just one day after Bachelet won a landslide victory for a second term as the country’s head of state.

The land acquired jumped in value after the local government changed planning laws allowing homes to be built on the site.

Opposition politicians have called on Davalos, who, in lieu of a first lady, acts as the president’s official companion, to reveal full details of his property and income.

“This needs to be investigated because there is reasonable suspicion that President Bachelet’s relatives made use of inside information,” said Deputy Jose Manuel Edwards of the center-right National Renewal Party.

The reports have diverted attention from another political scandal involving alleged secret payments from major companies to several politicians, including a deputy minister in the previous administration.

So far the president and her family, on vacation in the south of Chile, have not commented about the deal, but government ministers have defended Davalos’ business activities.

Government spokesman Jose Antonio Gomez denied that any laws had been broken or that political influence had been traded. But Finance Minister Alejandro Micco admitted “not everyone has access to the bank’s deputy chairman.”

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