d) The issuer of the certificates of deposit, which was required to meet the obligations
arising from such instruments, was an institution subject to the control of the
appropriate authority in the Cayman Islands.
e) The Banco de Montevideo S.A. was a financial institution subject to the control and
supervision of the Central Bank of Uruguay and, for several regulatory violations, was
first intervened, on June 21, 2002, by the Central Bank, which replaced its statutory
authorities and, on December 31, 2002, owing to the fact that its capital deficit had
become untenable, ordered its liquidation, a process that is also under the supervision
of the Central Bank of Uruguay as fiduciary administrator.
f) Some of the events that led the entity to be placed in administration in June 2002,
inasmuch as they constituted criminal offences punishable by law, were immediately
reported to the appropriate judicial authorities, which in August 2002 ordered the
imprisonment pending trial of the directors of the Banco de Montevideo S.A., and
ordered the same for one of its majority shareholders in December 2003 and,
subsequently, for a number of managers and staff members of the bank in August
2004.
g) In order to protect the rights of the depositors of the Banco de Montevideo S.A.
arising from their deposits placed in said institution and to protect the public’s savings,
the Central Bank of Uruguay sought and obtained the attachment of more than
300 assets owned by individuals and corporations directly or indirectly linked
to the aforesaid institution and also instituted a full trial for damages, with a view to
securing a conviction and proceeding to the liquidation of the attached assets in order
to repair the injury caused by the wrongdoings of the bank's directors.
h) In the framework of the liquidation process and through the vehicle created for that
purpose, known as the Bank Capital Recovery Fund, the depositors of the Banco de
Montevideo started, in September 2003, to recoup part of their savings.
i) The Banco de Montevideo S.A., together with Banco Velox in Argentina, Banco
Alemán Paraguayo in Paraguay, the Trade & Commerce Bank, and other companies,
comprise the so-called “Velox group”.
j) All of these companies went into liquidation, in accordance with the regulations in
force in the respective countries of domicile. Said liquidation is being independently
processed in form and substance in each State.
k) Under our law, the existence alone of companies belonging to the same group is not,
per se, sufficient grounds to apply the disregard theory, which by law is subject to proof
that the fraud caused injury to the creditors.
l) The fraudulent operations uncovered were not carried out for the benefit of the Banco
de Montevideo S.A., which, all to the contrary, has been a victim of the Trade &
Commerce Bank.
17. The State said that the Central Bank instituted a full trial for damages with a view to
securing a conviction and then proceeding to the liquidation of the attached assets in order to
repair the injury caused by the wrongdoing of the bank's directors.
18. The State said that the petitioners had recourse to adequate and suitable remedies to seek
judicial reparation for the material damages they alleged. Thus, pursuant to Article 31 of Law
17.613 of December 27, 2002, the Central Bank created a Special Commission composed of
three members with recognized credentials, whose task was to examine claims to see if they
met the three requirements established by the Law. Having analyzed said claims, the
Commission formulated on a case-by-case basis a recommendation to the Board of Directors of
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