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Banco de Costa Rica board directors suspended over loan controversy

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Banco de Costa Rica board directors suspended over loan controversy

The Costa Rican government has suspended five directors of Banco de Costa Rica over a loan approval controversy, El Financiero reported.

The suspended directors include Monica Segnini, who served as the president of the board, as well as Evita Argudas, Francisco Molina, Paola Mora and Alberto Raven. Two of the directors, Ronald Solís and Gustavo Arias, had already resigned.

Costa Rican President Luis Guillermo Solís earlier had requested for the officials to vacate their seats amid a legislative probe into $50 million worth of loans the board allegedly granted. The investigation led to the temporary suspension of the bank's CEO, Mario Barrenechea Coto.

The board, meanwhile, refused Guillermo Solís' request to step down, prompting the president to initiate proceedings for their dismissal.

The alleged irregularities involve Banco de Costa Rica's approval of sizable loans to certain companies, including a $32 million loan to electric cooperative Coopelesca and a $25 million loan to local cement importer Sicocem Costa Rica.

The five suspended directors will also be subject to a sanctioning process, according to Sergio Alfaro, minister of the presidency. Meanwhile, Solís and Arias will collaborate with the ongoing investigation.

New members of the board will be appointed during the next governing council, Alfaro said.

Separately, Moody's downgraded its baseline credit assessments on the bank, citing heightened concerns over the state-owned bank's corporate governance.