Santiago—Sociedad Quimica & Minera de Chile SA (SQM) announced April 18 that three major shareholders – Julio Ponce, Japan’s Kowa Group, and Potash Corp. of Saskatchewan Inc. – have signed a new governance agreement that requires all board decisions to receive five of eight votes, with the chairman refraining from voting. The move is seen as a way to diminish Ponce’s control of the company in light of his controversial stance within Chile.
SQM shares went up after the news, according to Bloomberg, which cited more cautious Citigroup analysts who downplayed the agreement, saying any of the parties may terminate it within a year of it coming into effect. In 2014, Ponce was fined about $70 million for illegally trading shares of his holding companies (GM Sept. 8, 2014); the fine is under appeal.
In 2015, former CEO Patricio Contesse resigned after it was revealed that he was involved in illegal financing of political parties. Some members of the board also resigned, and the board was later reconstituted (GM March 23, 2015; May 4, 2015). Currently, SQM is involved in a legal dispute with the government over mining rights.