The flagship of Argentina’s navy has been ordered held in Africa by a judge answering a complaint from a US hedge fund.
The Argentine foreign ministry describes the fund as if it were led by modern-day pirates, saying the seizure violates international law and that Argentinian President Cristina Fernandez will not bend to extortion.
Diplomats are working with the government of Ghana to “clarify the trickery that these unscrupulous financiers have mounted,” the ministry said.
The A.R.A. Libertad is a three-masted tall ship that stopped at the port of Tema, near Ghana’s capital of Accra, while training hundreds of navy cadets. That is where Elliott Capital Management, a US$15 billion hedge fund run by billionaire Paul Singer, caught up with the Argentines. The fund’s lawyers have searched worldwide for ways of collecting on Argentine bonds bought at fire-sale prices after the South American country’s record debt default a decade ago.
Most bondholders eventually agreed to cancel Argentina’s bad debts for about 30 cents on the dollar, but Singer is among those holding out for the full promised value of those notes, plus interest. Courts in the US and Britain have granted judgements worth US$1.6 billion to the hedge fund, but it and other bondholders are still suing for billions more and Argentina has refused to pay.
A court in Ghana on Tuesday ordered the ship held in port until Argentina posts a court bond equal to its value, which could be US$10 million or more. Singer would then try to collect that money.
The foreign ministry said on Wednesday that Singer’s hedge fund “is based in Cayman Islands, a fiscal hideout that is a colony of Great Britain, sheltering entities that refuse to submit to the laws of any jurisdiction.” Singer is also the main financial backer of the American Task Force Argentina, a lobby in Washington that has spread false information about Argentina, the statement said.
An Elliott spokesman declined to comment on Thursday, but American Task Force Argentina issued a statement saying that “Argentina’s status as an international scofflaw has been well-documented.” It said that the Argentine government has refused to honor any of the more than 100 court judgements that international creditors have against it, even though it has “the means to pay, with more than US$45 billion dollars in reserves.”