The bank accounts of the city of Merida, Yucatan, and the property he owns were embargoed on Wednesday over the municipal government’s failure to pay off a 10-year debt to Santander Bank.
The Yucatan court set a 5:00 pm deadline on Wednesday for the city to pay off a debt of 588.8 million pesos ($ 28.9 million) or reach a repayment agreement with a bank, but neither happened.
As a result, the court clerk imposed an embargo on the city’s assets.
All of the municipal government’s bank accounts, as well as 85 properties, five of his movable assets and two lines of government funding, are embargoed, Santander said.
Santander said he remains open to finding a solution that would allow the embargo to be lifted in a timely manner to avoid the negative effects of such a mechanism.
The large debt dates back to March 2011. when the municipal authorities signed a street lighting contract with AB&C Leasing, which was funded by Santander.
When the municipal government changed in 2012, authorities notified the bank that it would not make payments on the loan, arguing that there were irregularities with it. At the time, the mayor was Renan Barrera Concha, who is currently in his second term at the head of the municipal government.
Barrera said the 5,000 Chinese-made streetlights leased by the municipal government led by Angelica Araujo were not working and ordered them to be removed. He decided to end his monthly payments to Santander in the amount of 8 million pesos.
Araujo called the decision irresponsible and warned that it would negatively affect the citizens of Merida.
The 2012-2015 government, led by Barrera, initiated a lawsuit seeking to ward off liability for repaying the loan, but a Mexico City judge ordered this to be done in 2014, ruling that the contract and the previous administration had transferred responsibility for him to Santander. were legal.
For several years, Merida’s council continued to pursue legal action against its responsibility to service the loan, but to no avail. Late last month, a Mexico City court once again ruled that it must repay the loan, which enabled the Yucatan court to set a deadline on Wednesday.
Mayor Barrera has not publicly commented on the matter. He was elected mayor for a third term in elections held on June 6.