UPDATE 2-Chile's SQM sees $7 mln hit to results from expenses scandal
(Adds detail on regulatory investigation)
SANTIAGO, March 31 (Reuters) - A tax and illicit payments scandal at Chilean fertilizer group SQM worsened on Tuesday as the company took a $7 million charge against first-quarter earnings and board members faced investigation by securities regulators.
Authorities in Chile are investigating whether money from SQM and other companies was siphoned to fund electoral campaigns, principally for the UDI, a right-wing party that has links to the 1973-1990 Augusto Pinochet dictatorship.
SQM, which has rights to some of the world's largest nitrate and lithium reserves, said earlier this month it had identified around $11 million in improperly documented tax expense payments from the office of its recently fired chief executive officer.
In a statement on Tuesday it said it was in the process of amending its annual statements. As a result, around $4 million in expense-related payments and another $3 million in interest-related payments had been made and will be charged to net income in the first quarter 2015.
Additional penalties and tax charges could also be applied by authorities, SQM said.
"The company cannot guarantee that (external tax) reviews will not lead to the identification of further situations that could result in further tax implications," it said.
The campaign financing scandal has rocked the Chilean establishment and led investors to question governance at the company. Its board is led by controlling shareholder Julio Ponce, Pinochet's former son-in-law.
Three board members appointed by Canadian stakeholder Potash Corp have resigned in protest. Continued...