SPEECH. Candidate Rafael López Aliaga is running for president of Peru for the first time.

Candidate promoting hate speech in Peru is partner of global hotel corporation

Candidate promoting hate speech in Peru is partner of global hotel corporation

SPEECH. Candidate Rafael López Aliaga is running for president of Peru for the first time.

Photo: Facebook profile of Rafael López Aliaga

Candidate Rafael López Aliaga – a social media hate campaign broadcaster – promotes the image of a successful entrepreneur. However, the facts tell another story. In 2001 he was interrogated in Congress for alleged tax evasion, in 2005 he unleashed a pitched battle in Lima financial center for business problems, and in 2017 the prosecution opened an investigation for money laundering in the Panama Papers case for using offshore companies to move suspicious resources. In this context, one of his largest companies in the country, Peru Holding de Turismo, had millions of losses between 2008 and 2019. Precisely, this company has investments with the multinational Belmond LTD (formerly Orient Express), benefitted by the privatization process started by Alberto Fujimori’s regime. Today this chain operates hotels and trains in Cusco, Urubamba, and Machu Picchu, due to concessions and usufructs delivered by the Church and the State ending between 2025 and 2047.

2 Marzo, 2021

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The Belmond hotel chain is a global multinational of luxury tourism owned by the corporation led by the third richest man in the world, the Frenchman Bernard Arnault. Its partner in its hotel investments in Peru is the presidential candidate Rafael López Aliaga Cazorla (61), leader of Renovación Popular party, member of Opus Dei, and active promoter of disinformation and hate campaigns on social networks against journalists and activists promoting human rights, LGBTI and gender agenda.

The history of López Aliaga began in 1961 in Lima, although he spent his childhood and youth in the north of the country until he went back to study industrial engineering. He then forged his career as a banking executive in Lima and entered the investment sector in the ‘90. Due to the state assets privatization process promoted by the government of Alberto Fujimori, López Aliaga and his partner Lorenzo Sousa Debarbieri, participated in the hotel business set up by Orient Express Hotels (Belmond LTD, since 2014) after arriving in Peru.

BELMOND LTD, BASED IN BERMUDA'S CARIBBEAN TAX HAVEN, EFFECTIVELY CONTROLS EIGHT ASSETS IN PERU.

The presence of López Aliaga in these businesses, however, had no media exposure until 2001, when he was taken to Congress for an investigation that included LAN Peru and Peruval Corp, one of its largest companies at the time, for sale of shares and alleged tax evasion. In 2005, his name returned to the stage for a pitched battle in the financial center of Lima. At that time, he was hold responsible for an incursion into Peruval offices, supported by a violent group of people throwing stones, in the midst of a business dispute with Sousa Debarbieri.

Since that episode of violence on the streets of Lima, López Aliaga kept a low profile, and only emerged to threaten to prosecute anyone who got in the way of his business dealings: either against the media that outlined his investments; State entities against which he litigated for his companies, or private entities who questioned his leap into politics in 2006, as councilor for Solidaridad Nacional party, at that time led by the former mayor of Lima, Luis Castañeda, who is now investigated for the Lava Jato case.

In this electoral scenario, OjoPúblico presents a business X-ray of López Aliaga, who has boasted of having more money than one of his rivals in the contest, César Acuña, the other controversial businessman, former governor of La Libertad and millionaire financier of political campaigns, who created a party to try to become the president of Peru. Today López Aliaga has a foot out of the electoral contest for an alleged violation of the electoral rules, when he promised he would donate his salary if he became the president.

 

The ‘dealmaker’ of the Belmond chain in Peru

OjoPúblico's research began with the analysis of the financial statements and reports of a key company which López Aliaga has led since at least 1999: Peru Holding de Turismo SAA (PHT). The documents confirm that his affiliated are owners of PHT. For example, Via Peruval Corp (involved in the Congress research in 2001 and the violent events in 2005), Peru Hotel Holding and Latin Security Corp control 33%; while two other corporations he chairs (one under the acronym Acres) have a participation of 49%. The most precious investments of PHT are hotels and trains in Cusco.

In this sense, López Aliaga has relied on the prestige and strategic location of these assets – managed since 1999 by Belmond LTD, then called Oriente Express – to promote his image as a successful entrepreneur in interviews, while in social networks he spreads hate speeches. The financial statements and reports submitted to the Superintendency of the Securities Market (SMV), however, did not reveal exactly their actual participation in the business with the multinational.

For this purpose, OjoPúblico reviewed López Aliaga's business profile at the Public Registries and identified a cluster of PHT-related companies, from their shareholders, subsidiaries and other companies related to offshore companies in Panama and the British Virgin Islands. The analysis also shows others unrelated to his real estate businesses, such as the Peruvian Association of Covid Victims and Affected People, created last year in the midst of the pandemic, together with Yorry Warton, one of his candidates for Congress and López Aliaga's lawyer.

 

 

Precisely, the Public Ministry opened investigation to López Aliaga for money laundering in 2017 for the Panama Papers case and included Acres Investments LTD of Panama and a company with the same name, but in Nevada (U.S.A.), considered territories with little or no taxation by entities fighting tax evasion. According to the prosecution, López Aliaga “has not taxed foreign-source revenues [...] hence he would have used offshore corporations or companies to channel assets of suspicious origin.”

The exact relationship between López Aliaga and the Belmond LTD chain is beginning to clarify when reviewing the reports submitted by the luxury tourism multinational to the U.S. Securities and Exchange Commission (SEC), the stock exchange auditor in the country. Two documents are key to this analysis: the statement by Belmond LTD on its merger with Moet Hennessy Louis Vuitton (LVMH) owned by French Bernard Arnault (the third richest man in the world, according to Forbes); and his annual report, both delivered in 2019 to the SEC.

These documents confirm that Belmond LTD, based on Bermuda's Caribbean tax haven, effectively controls eight assets in Peru: four hotels in Cusco, Urubamba and Machu Picchu (which López Aliaga shows of as investments of Perú Holding Hotelero SAA in his reports to the SMV), as well as two additional companies in Lima and the Colca Valley and two trains running south of the Andean region, through subsidiaries and agreements, respectively, which guarantee Belmond the control of 50% of the shares, as well as key positions in the board of directors and in the management of these subsidiaries.

Moreover, the CEO of executive and managerial team of Belmond LTD – bought in 2019 by LVMH, global leader of luxury brands such as Dior, Tiffany, Givenchy, Louis Vuitton, Dom Pérignon and Moët & Chandon – has been the Dutch Hans Roeland Vos (based in the UK) for several years now; and the key man in Peru has been the French Laurent André Carrasset Gros, as Vice President of Belmond South America Division, and legally as general manager or attorney in most of the companies controlling the hotels and trains in Lima, Cusco and Arequipa.

 

Photograph of Bernard Arnault
MAGNATE. The third richest man in the world, the Frenchman Bernard Arnault, controls the Belmond luxury hotel chain, through its LVMH emporium.
Photo: Jérémy Barande

 

Therefore, the Belmond LTD board, even before the merger with LVMH, considers López Aliaga only as the dealmaker who allowed the final arrival of the chain to Peru in 1999 (then Orient Express), according to a presentation made in London in 2015 by the executive board of the chain. Even though López Aliaga takes part in the shareholders' meetings of the companies managing these investments in Lima (along with his partner Sousa Debarbieri), and even appears as chairman of the board of some of them, the cluster is under the control of Belmond LTD, according to reports.

In fact, in its report to the U.S. Securities and Exchange Commission in 2019, Belmond LTD included the Monasterio and Palacio Nazarenas (Cusco) hotels, the Machu Picchu Sanctuary Lodge (Machu Picchu) and the Río Sagrado (Urubamba) as their own assets in Peru; but also Las Casita (Colca in Arequipa); and Andean Explorer and Hiram Bingham trains, to name the most outstanding assets of the chain. In the report, they are described as “Belmond properties and their locations”. López Aliaga and Sousa Debarbieri are only included as “Peruvian investors of [the other] 50%”, although without identifying them.

Interestingly, Belmond LTD's operations extend throughout the Americas, Europe, Africa, and Asia. In its 2019 report to the SEC, the chain considers its hotels and trains in Peru as keys to their business, as between 2016 and 2018 they were its second source of global profits, with an average of US$14 million net income, only surpassed by their operations in Italy. For this reason, Belmond LTD mentioned in that report, that any change in Peru's economic and regulatory policy, especially with the arrival of a new government, could “adversely affect the business and the results of the company's operations.”

In that regard, in his statement to JNE, López Aliaga did not provide detailed information on his participation in companies in Lima and also omitted information on his positions in those companies. However, he then sent a letter to the electoral body acknowledging his participation in companies of the energy, stock market and real estate, and hotel-rail sectors (of the eight listed there he has more than 50% shares in only four of them: Logos Development, Peruval Corp SA, LatinSecurity Corp and Peru Hotel Holding).

The presidential candidate did not include Peru Hotel Holding, the company he chairs, although the three mentioned companies hold 33% of its shares.

 

Financial Statements: Peru Holding
de Turismo Losses

López Aliaga's business x-ray also included an analysis of Peru Holding de Turismo SAA (PHT) based on its financial statements and reports to the Superintendency of the Securities Market (SMV), between 1999 and 2018. According to these reports, the most important company led by the candidate of Renovación Nacional, with a participation of at least 33% through other companies, had millions in losses for almost 12 consecutive years.

These documents were prepared up to the beginning of 2019, a year before Peru declared the Covid-19 health emergency. Therefore, these reports do not include the 2020 financial statements, which should also yield losses of millions due to the impact of the pandemic on tourism. In the case of Peru, the economic crisis and the absence of tourists also reached the Andean south, where the main Belmond LTD hotels operate, and in which López Aliaga has investments.

 

 

PHT's millionaire losses are confirmed before the SMV by the very auditors of these financial statements: Ramírez Enriques y Asociados firm, between 2008 and 2019; and the Portal Vega & Asociados, part of the accounting multinational Kreston International, from 2009 to 2019. These figures in red are recorded in these reports to the SMV under “year's losses”, under the item of consolidated comprehensive income, in each financial report of PHT for the last twelve years.

According to the financial statements of the flagship headed by López Aliaga, Peru Holding de Turismo (PHT) has reported losses since 2008. For example, in 2015, the figures in red exceeded S/143 million; that is, they were 25 times greater than their income for the same year. In 2008, losses reached S/52 million, while between 2009 and 2014, losses ranged from S/3 to S/6 million. In 2016, losses reached S/44 million, nine times their income.

Only in 2017, PHT reported a S/4 million profit, followed by a similar loss in the subsequent annual period. For 2019, before the pandemic, the state of emergency and the economic crisis, the company had losses for S/8.4 million, according to its financial statements reported to the SMV.

According to the documents, PHT's losses reflect the consolidated statements of eight companies in this group. Seven are related to the hotel sector: Perú Hotel y Servicios, Perú Hotel y Corp, Perú Hotel Aguas Calientes, Perú Hotel Inc, Perú Hotel Holding, Marsano Palace Hotel and Marsano Palace. The eighth is Compupalace Peru, a well-known gallery in Miraflores, where the old mansion known as Casa Marsano once stood.

PERU HOLDING DE TURISMO REPORTED MILLIONS IN LOSSES FOR 12 YEARS, DESPITE THEIR LUXURY HOTELS IN CUSCO.

By 2019, PHT reported Asociación de Crédito Social (Acres), as already indicated, among its largest shareholders. This company also exercises the general management of this group for an annual salary of US$300 thousand. Since its inception, Acres has been chaired by López Aliaga, and has invested in sectors, such as the agro-industrial, mining, and financial. In the scheme of those investments, Hernán Garrido Lecca Montañez, former minister of the second APRA government, stood out as his partner in the creation of a subsidiary in 2014.

The history of PHT began in 1991, although their oldest available annual report is from 1999. By that year, López Aliaga was already their chairman and led this group with Sousa Debarbieri (with whom he would quarrel in 2005). By 2007, after the confrontation between the two, the latter was no longer a director at PHT. Six years later, López Aliaga consolidated in the group's shareholding through Acres, one of their main shareholders. To date, Acres, together with Asociación de Educación y Vivienda para Todos, both chaired by López Aliaga, control almost 50% of the group's shares.

 

The Catholic Church and the State:
Usufructs and concessions for hotels and trains

OjoPúblico also analyzed the operations of Belmond LTD hotels and trains in the Andean south based on the reports to US SEC and Peru SMV. From here it follows that the multinational chain controls Monasterio Hotel, located in a 16th century building in Cusco, as well as Palacio Nazarenas Hotel, a monastery sheltering invaluable Inca pieces found when building it, as a result of usufruct contracts signed by the Archbishopric of Cusco for 30 years (to expire in 2047) and 22 years (to end in 2035), respectively.

In addition, the Machu Picchu Sanctuary Lodge –the only hotel located a few meters from the entrance to the legendary Inca citadel– is located on land under concession by the State in 1995 for 30 years. Since 2020, the Regional Government of Cusco stated to review this concession, for some alleged debts of this chain of hotels. Finally, Belmond LTD operates the Rio Sagrado Hotel, built on the slopes of the Urubamba River in the heart of the so-called Sacred Valley of the Incas.

 

Photograph of Belmond's train in Peru
INVESTMENTS. Belmond LTD has investments in Transandino and PeruRail Railways, through which they have access to tourist sites in the south of the country.
Photo: Belmond

 

In the case of tourist trains running through the Andean south, Belmond LTD owns half of Ferrocarril Trasandino S.A. (Fetransa) together with the Panamanian offshore Peruvian Corp associated with López Aliaga, according to the Public Registry at that tax haven. Since 1999, when it was created, Fetransa has managed two railways they received from Peru as part of a 30-year concession. The first runs through Arequipa, Puno, and Cusco, while the second reaches Machu Picchu gate. The Government refused to extend the concession, and it will therefore end in 2034.

Fetrana, which had revenues of US$34 million, according to the financial statements submitted to SEC, entered an agreement with a similar company to transit through these routes. It is PeruRail, property of Belmond and Peruvian Trains & Railways S.A., created in 2001 by López Aliaga and Sousa Debarbieri. According to its website and financial statements, PeruRail operates six trains, with two outstanding ones. The first is the luxury train called Hiram Bingham, which enters the town of Machu Picchu; while the second is the Andean Explorer, a train purchased from a Belmond subsidiary in Australia, which today runs through Cusco, Arequipa, and Puno.

 

 

PeruRail, under the control of Belmond LTD and its Peruvian partners, also transports cargo, where their main customer is Minera Las Bambas for transporting copper. However, their income mainly comes from their tourist transport services. For 2018, PeruRail's total revenues were US$163 million, of which US$95 million came from tourism, while cargo transport accounted for US$65 million.

To complete information on this business profile, OjoPúblico contacted López Aliaga's campaign team two weeks ago, through his press area, to interview him about his exact shareholder relationship with Belmond LTD; the economic losses of the company chaired by Peru Holding de Turismo SAA; as well as the investigation of the Public Ministry against it in the wake of the Panama Papers case. However, there was no response until press time.