Argentina’s President Mauricio Macri has been accused in court of a conflict of interests after his government forgave a $296m debt owed by his family’s company.

The case involves the Macri family firm Socma, which in 1997 took charge of Argentina’s privatized postal service under the free-market government of former president Carlos Menem.

The postal service Correo Argentino was renationalized in 2003 after alleged mismanagement by the Macri firm and for failing to pay the concession fee for several years in a row. At the time, Socma claimed that the investments it had made in the postal service compensated for their failure to pay the agreed fee.

The Macri family’s original debt with the state was 296m Argentinian pesos when the legal dispute began in 2001, two years before the postal service was renationalized. That was equivalent to $296m at the time because of the one-to-one convertibility law then in force, with the exact size of the debt today after 16 years of inflation and multiple peso devaluations at the centre of litigation.

The long-running lawsuit over the debt was settled without any public announcement last year, when a legal representative for the government accepted a proposal under which Socma would pay off the debt in instalments over 15 years with interest payments well below market rates.

According to the charges presented by the prosecutor Juan Pedro Zoni on Tuesday, the reduced interest rate – and an instalment plan under which the majority

of the debt will be paid toward the end of the 15-year period – means that the company would end up repaying only around 1.18% of the total debt.

Macri, his family and Socma have denied any wrongdoing, and on Tuesday, his government defended the deal.

“After 12 years of neglect and no resolution by the authorities of the previous government, the ministry of communications worked on the outline of an agreement to end a discussion that was clearly damaging for the state because it wasn’t being resolved,” Macri’s cabinet chief, Marcos Peña, told the press.

Peña attributed the outraged reaction to the debt deal on this year’s forthcoming midterm congressional elections. “In an electoral year, these discussions will always become political,” the cabinet chief said.

Last year’s settlement came to light last week when another prosecutor, Gabriela Boquín, appealed against it, saying it was “ruinous” and “inadmissible” for the Argentinian state.

In Tuesday’s accusation against Macri and the communications secretary, Oscar Aguad, Zoni said the settlement caused “pecuniary damage to

the coffers of the state” and asked federal judge Ariel Lijo to launch an investigation to determine if Macri had intervened in the decision that benefited his family.

The Socma firm was originally owned by the president’s father, Francisco Macri, who turned it over to three of his children, including Mauricio Macri, in 2007.

Mauricio Macri in turn turned over his shares to three of his own children in a series of steps between 2008 and 2014. He was elected president in 2015.