Venezuela's foreign minister says 90 per cent of his government's US$1 billion (NZ$1.2b) debt to Panama is fraudulent and criminal charges are likely to result.
Elias Jaua said the government paid businessmen for imports, but the goods never arrived. So Panama wasn't owed 90 per cent of the debt.
Jaua's comments broadcast Sunday (NZT Monday) came after Venezuelan President Nicolas Maduro broke relations with Panama last week over its call for the Organization of American States to discuss a crackdown on protests in Venezuela. He also froze economic transactions.
Panamanian President Ricardo Martinelli has said he hoped Venezuela's break in relations would not affect payment of its debts to Panamanian businessmen.