Argentine industry and government lock horns
It is reported that Argentina's industry is up in arms over what it sees as the government's increasing intervention and official attempts Hot Dipped Galvanized Wire to gain control of the decision making processes in the beleaguered private sector.The flare up followed a developing row between steelmaker Siderar and President Ms Cristina Fernandez de Kirchner's government.A Siderar dividend payment this week was blocked by a judge after a series of incidents that critics linked to the government's campaign to tighten control over leading companies.As a result, a 2010 dividend payout of USD 359.5 million didn't go out Friday as planned by the company, which had decided to ignore an April ruling by the stock market regulator that effectively annulled the payment by declaring a shareholders meeting void.
Judge Mr Hernan Papa argued Siderar wasn't entitled to pay dividends using funds from reserves set aside for future dividend payments. Whatever the merits of that argument, critics said,Tie Guan Yin, the judge's action was widely seen as a victory for the government and Siderar Hot Dipped Galvanized Wire promptly vowed to defend itself against the ruling.The dispute erupted after the government nominated the Anses state pensions' agency representative for the board, a move that was opposed by Siderar. The agency has stakes in 42 companies that were nationalized by Fernandez in 2008.Critics said the Anses representation on the boards of Argentina's large companies allows the government more interventionist power than is desirable for future growth of the private sector in Argentina.Siderar is majority owned by Ternium SA which has production and distribution operations throughout the country, employing more than 5,000 people. The company manufactures hot rolled, cold rolled, hot dip galvanized, electro galvanized, pre painted and tinplate steel sheet products. Siderar has nine manufacturing centers throughout the country.The government's response to Siderar's resistance has been more radical than before. Fernandez signed a decree to scrap a rule that had limited the state to holding no more than 5 percent of voting rights on company boards, even when its stakes were greater.
Critics said the decree Hot Dipped Galvanized Wire was a precursor to further government attempts to increase state intervention in the nationalized companies. The Anses holds a 26% stake in Siderar, but steelmaker Techint Group has indicated interest in buying it off, adding complications to the ongoing dispute.The industry is also considering a vigorous fight back on the presidential decree that will allow the government to exercise full voting rights in companies where Anses holds shares.
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