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Chile's Max Marambio faces criminal charges in Cuba.

Max Marambio, the well-connected Chilean entrepreneur, one-time guerrilla and former bodyguard of the late Chilean President Salvador Allende, is in big trouble with Cuban authorities.

Marambio faces charges in Havana ranging from fraud and bribery to embezzlement and forgery of bank documents in connection with Alimentos Rio Zaza, the food processing joint venture between the Cuban government and Marambio's Chilean International Network Group (ING). Rio Zaza is best known for its Tropical Island line of fruit juices sold throughout the island.

In July, Cuban authorities--through the government's Gaceta Oficial--summoned Marambio to voluntarily return from Chile to Cuba by Aug. 23 for questioning, or face an arrest warrant. Apparently, the businessman declined to fly to Cuba.

How did Marambio, an old personal friend of Fidel Castro, get himself into such a mess?

According to the respected Chilean newspaper El Mercurio, Cuban prosecutors want to investigate transactions Marambio made until March 2009 with Alejandro Roca Iglesias, Cuba's one-time minister of the food industry (and reportedly a trusted Fidel confidante).

That inquiry got as far as the March 2010 questioning of Rio Zaza's general manager, a 59-year-old Chilean citizen living in Havana named Roberto Baudrand.

Baudrand, who was prevented from leaving the island after two rounds of questioning, died in his apartment in Havana's Playa section a month later--allegedly due to respiratory problems triggered by a lethal combination of drugs and alcohol, according to a Cuban government autopsy.

CASH CRUNCH TRIGGERED MARAMBIO'S WOES

Some observers who have followed Marambio's business activities in Cuba think his troubles really began in early 2009, when officials of the cash-strapped Castro regime froze $80 million in assets of various foreign firms held at Banco Financiero Internacional.

Hit hardest by the temporary freezing of such funds, according to the Chilean daily newspaper La Tercera, were 280 Spanish investors active on the island.

That measure also hit Marambio as well, denying his ING venture $23 million to cover the operating costs of Alimentos Rio Zaza.

Unable to pay his overseas suppliers (such as TetraPak, whose material was used to make juice cartons, Marambio had no choice but to shut down the firm's two production facilities at Santi Espiritu and Jaguey Grande in February 2010, causing a loss of 500 jobs.

Some have also said the Castro regime was displeased with Marambio's political support for a maverick Chilean presidential candidate, Marco Enriquez-Ominami, who split the left-wing vote in Chile, handing victory to conservative billionaire Sebastian Pinera.

What really happened between Marambio and the regime seems to be the result of Raul Castro's recent anti-corruption drive. In fact, the current political climate in Havana may explain Marambio's decision not to risk his personal liberty by returning to Cuba.

Havana-based BBC correspondent Fernando Ravsberg confirmed that Cuban officials detained various individuals earlier this year on corruption charges, including officials of Havana's Jose Marti International Airport, in a scandal involving Cubana de Aviacion.

IMPACT ON FOREIGN INVESTMENT DEBATED

"Some of us are starting to wonder how business-friendly Cuba will truly be in the near future," said one foreign entrepreneur familiar with Cuba who asked not to be named.

"If the Cuban government can cause a seemingly healthy company like Alimentos Rio Zaza to shut down over the country's cash liquidity problems, if that same government can later call in a foreign executive and have him questioned like a criminal, this all makes for a less investor-friendly climate in Havana."

Angel Domper is a former business associate of Marambio, who went on to start up his own successful food export firm, TJP Internacional, supplying Cuba with Chilean-made packaged food products. He's among those who insist Cuba is still a worthy investment.

"Rio Zaza and Max Marambio is an individual case," Domper told CubaNews by email. "This situation does not affect other Chilean or foreign businesses. Cuba, like any other country, has its laws, like it or not. When foreign companies come to set themselves up in Cub], they must respect its laws."

Domper continued: "It's not that the government is applying a harder hand to [foreign] businesses. I'd say it's the opposite. The government is finishing dictating new legal norms that favor above all real-estate investment [by foreigners].

"What there is in the Marambio case is the application of the law to a concrete and specific case, a process that started recently, and one will have to see how it ends up. He who wants to see something different, I believe, is profoundly mistaken."

FUTURE UNCLEAR FOR CHILEAN BUSINESSMAN

A former Cuban trade executive who wants to remain anonymous agrees with Domper.

"By no means is this a vendetta against foreign investors," he says. "I know of many foreign investors who are currently doing very well in Cuba and without hindrance, as long as their business ventures are transparent and do not deviate to clandestine corrupt practices, and this goes for all businessmen--Spanish, Italians and Latin Americans."

Domper believes that the Marambio saga will go no further.

"It seems there is no extradition treaty between Cuba and Chile. Marambio will not return to Cuba unless he is certain that he will not be submitted to a legal process that will prevent his ability to leave the country," Domper told us, noting that Marambio is now a VIP in Santiago. "These days, he is a very rich man in Chile, a prominent businessman."

Indeed, Marambio has proven adept at evading danger when the political winds grow turbulent--the first time in the '70s when Pinochet took power in his country, and now.

Because of this, the charismatic Chilean executive--who also happens to be a licensed helicopter pilot--may well have earned himself the nickname "the escape artist."

Vito Echevarria, a New York-based freelance journalist, writes regularly for CubaNews about business, e-commerce, the arts and entertainment.
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Author:Echevarria, Vito
Publication:CubaNews
Geographic Code:3CHIL
Date:Sep 1, 2010
Words:958
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