Solvent S.A. Part: A



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Language: English
also available in Spanish
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Case Study


This case is about Solvent S.A. and disputes between its shareholders eventually leading to a shocking turn of events. The beginning of the case gives details about the cement industry as well as information on how the company was started. When the company was founded, the shareholders included family members from the Salazar and Santos family and a family friend, Edgar Dangond. It describes how the there was a lot of trust between the shareholders and there was a family feel.

But then it goes on to describe how a series of disputes split the shareholders into two groups. The first dispute happened in November 2005, when there was a cash flow problem so the general manager, Dangond’s son, decided to delay the payment of dividends two weeks without informing shareholders. The shareholders were upset about this and included it as a point at their meeting. During this meeting, the general manager’s salary came up and things started to get ugly. While Santos and Dangond considered the salary to be acceptable, Salazar and his family considered it to be totally unrealistic. This split them into two groups.

The situation continued to go downhill leading to the approval of a new board. After yet another disagreement where Javier Dangond and Juan Santos were accused of working together too closely, Santiago Santos Prado shocked the shareholders during a meeting where he read a letter stating that the company culture had changed and there was no longer trust so he and his son wanted to either sell their shares or to buy more shares until they reached 51% and were no longer the minority.

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