Colombia tackles “pyramid” crisis

The Colombian government has declared what it is calling a state of social emergency to deal with a crisis over the collapse of pyramid finance schemes.

Hundreds of thousands of people have been left ruined by bogus companies that made promises of interest rates of up to 300 percent.

The new government declaration is aimed at trying to recover the money.

Interior Minister Fabio Valencia said: “The government has declared this state of social emergency to take measures to stop investments and the development of such non-authorised institutions. We will confiscate the assets of those companies and return the money to investors, according to what is possible.”

There have been scenes of violence in many places where the pyramid schemes collapsed, with angry investors attacking the offices of those running them.

Officials estimate that up to 240 bogus companies were involved, and they collected the equivalent of up to 700 million euros.

Copyright © 2009 euronews

tags: Colombia, Economy, Financial Crisis