Pinochet’s ex-son-in-law to leave SQM shareholder group

Julio Ponce, the former son-in-law of Chile’s late dictator Augusto Pinochet, has decided to step back from the holding companies that his family utilizes to maintain a significant stake in the lithium miner SQM. As part of a proposed restructuring of the ownership structure of SQM, the number of holding companies will be reduced to just two, as declared in a regulatory filing made on Thursday. In a separate communication, Ponce announced that he will be transferring control of the shareholder group to his daughter, Francisca.

This move by the 79-year-old businessman is significant for SQM at a crucial juncture. Currently, SQM, the world’s second-largest lithium supplier, has agreed to form a partnership with Codelco, Chile’s state copper giant, to collaborate on the Atacama brine operations in an effort to extend operations beyond the contracted expiration date in 2030. However, this collaboration is facing resistance from certain Chilean politicians and another major SQM shareholder, Tianqi Lithium Corp. Approval from Chinese antitrust regulators is still pending for this partnership to move forward.

Ponce played a vital role in a management buy-out of the state-owned SQM during the 1980s, a period when Pinochet held power in Chile. He went on to become the chairman of SQM in 1987. His daughter, Francisca, is the third child out of four born to Ponce and Veronica Pinochet before their marriage was annulled.

Throughout his tenure at the company, Ponce successfully defended against a takeover bid by PotashCorp. in 2006 by forming an agreement with the Japanese trading firm Kowa. However, he resigned as chairman in 2015 due to a probe into illicit political campaign financing, which resulted in a settlement of $30 million with the US Securities and Exchange Commission and a fine for SQM’s then-CEO. Ponce himself avoided any formal charges. Additionally, he battled allegations of market manipulation in court and was able to reduce a significant fine from $70 million.

Ponce reflected on his journey and the controversies surrounding it in a statement made on Thursday, where he announced his decision to step back from the forefront of the ongoing saga. The reorganization plan presented by Ponce’s Norte Grande SA outlines a series of corporate actions that will lead to the emergence of only two holding companies: Soc. de Inversiones Oro Blanco and Potasios de Chile.

Following this announcement, SQM’s shares experienced a modest 0.5% increase in value in Santiago. In contrast, Norte Grande saw a substantial 20% surge in its share value, marking the most significant intraday gain since late 2015.