How not to run a company (or a country)

June 29, 2003

Imagine this:

-On Friday I see the financials of PDVSA as estimated by a local economist. He projects a loss of close to US$ 1 billion.

-Accounts Receivable at PDVSA as of May 15th. are reported to be US$ 566 million

-The Venezuelan Central Bank registers oil revenues ay US$ 4.3 billion for the first quarter. The real number was US$2.14 billion.

-The Minister of Finance says on June 21st. that to remove exchange controls, “the flow of foreign currency from PDVSA has to stabilize“.

-The President of PDVSA says today that PDVSA’s financial will be handed in to the US Securities and Exchange Commission by July 15th.. They are due tomorrow. (PDVSA has debt registered in the US).

So what does the Government do? PDVSA paid the Government a dividend of Bs. 915 billion for the first quarter of the year. I definitely hope that is well explained in the financials to the SEC. But how will these people explain to their children what they have done?

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