Rumasa
Essay Preview: Rumasa
Report this essay
1.- INTRODUCTION
Rumasa (Ruiz Mateos Joint-stock Company) was a Spanish holding company of companies expropriated by the Spanish government of the PSOE (SPANISH SOCIALIST PARTY) on February 23, 1983, by virtue of the Decree – law 2/1983. The group Rumasa, in the moment to the regulation be published, was constituted by 700 companies, with a staff that was reaching 65.000 persons, invoicing approximately 350.000 million pesetas (more than 2.000 million Euros) annual.
2.- ACTIVITIES OF THE COMPANY
The company was growing and diversifying his activities, turning this way into a corporate group that some were resting to others. Rumasa was present, between others, in the following sectors:
It pays: Bank AtlДЎntico, Bank of Sherry, Banking MasavД©u, Exbank, AVA, Eurobank, Banfisa
Hotel and catering business (Hotel management): Chain hotel “Hotasa”, whose hotels had name of animals and plants(floors): ” The “, greyhounds ” The hound ones “…
– Wine production: Warehouses Paternina, Garvey.
– Department store: Galleries Boasted, popularly known as “Galleries”.
– Shops of luxury: Loewe.
-Education: College Izarra.
The emblem of the whole corporate group was a bee, symbol of laboriousness, contained in a hexagon. The Holding company was producing a magazine for his personnel: “The Beehive “.
In the moment of the expropriation, in 1983, the group Rumasa 700 companies constituted it, with a global insole (staff) of 65.000 persons and a turnover (invoicing) of 350.000 million pesetas.
3.- EXPROPRIATION FOR THE STATE.
On February 23, 1983, the Ministers Council of the Government of Spain decrees [1] the necessary expropriation of the holding company under the protection of the forecasts contained in the articles 33.3 and 128.2 of the Spanish Constitution. The reasons adduced in the decree of expropriation are:
* The repeated lack of external audits to the banks of the group as of his more important societies (from the year 1978).
* The permanent obstruction to the activity inspection of the Bank of Spain.
* The disproportionate risks assumed by the banks that were financing internally to the group with respect of the solvency of the group.
* The inattention to the multiple warnings of the monetary authorities to RUMASA, recommending a more prudent politics (policy) of investments and a disregards of risks.
* The risky spiral of acquisitions and investments of the group.
The government used the expropriation, instead of the least traumatic formula of intervention of only the banks, for the complexity of the studding of the group and on not having considered the problems like relating to the moment, but structural. Between among the adduced reasons there were the public usefulness utility and social interest, the defense of the stability of the financial system and of the legitimate interests of the depositors and workers, and finally the respect of the rights of the shareholders by means of the payment for his shares. Michael Boyer, the minister of Economy and Estate when there took place the expropriation and one of the last persons in charge of the same one, affirmed in 1997 that: Rumasas expropriation was not a measure sanction or punitive against Ruiz-Mateos for a few supposed crimes that had corresponded to the courts to purify. It was a measure of economic politics, with which the total crisis of a group wanted to be avoided in bankruptcy, which, in the difficult circumstances of 1983, seemed to us that it might have a few very serious consequences . The extraordinary of this expropriation did that numerous theories were arising conspiracy it brings over of the same one, partly her(it) making alike to a theft the businessman Jose Maria Ruiz-Mateos on the part of the State in general and of the PSOE(SPANISH SOCIALIST PARTY) especially. These theories are detailed down below.
4.- THE JUDICIAL FIGHT.
After the expropriation Ruiz Mateos he flees to London on March 4, 1983. On December 1, 1985 he is extradited to Spain.
From this moment have followed multiple judicial processes, which in the first part had as object dissolve the legality of the operation of expropriation. The second shift of judicial procedures they have continued, on one hand with Ruizs attempt of recovering RUMASAs diverse companies and for reverting his later sale, and on the other hand the Spanish District attorneys office has been suing him a civil responsibility of 677.500 million pesetas (more than 4.000 million Euros) for the condition of the group in the moment of the expropriation and for the injection of money that he needed later.
The first judgment of fundamental importance in this matter is the dictated one for the Constitutional Court in 2-12-1983 (Judgment TC 111/1983). The Judgment scorns the resource of unconstitutionality promoted by deputies of Popular Alliance against the Royal Decree – law 2/1983. In the voting of the Judgment there was tie between twelve justices that were composing the Plenary session of the Constitutional Court; provided that between six justices favorable to the lack of esteem of the resource his President at the time, Manuel GarcДa-Pelayo and Alonso was, the resource was scorned (the President has ” quality vote ” in case of tie).
The Constitutional Court solved that the expropriation was constituted in 1991. The Courts Constitutional