Argentina leading steelmaker clashes with government over company control
A planned dividend payment by Argentine steelmaker Siderar was blocked by a judge on Thursday in the latest twist in a row linked to President Cristina Fernandez de Kirchner government's efforts to tighten control over leading companies.
The steel company had planned to pay a 2010 dividend of 359.5 million US dollars on Friday despite a ruling last month by the country's stock market regulator that effectively annulled the payment by declaring a shareholders meeting void.
Siderar is not entitled to pay dividends using funds from ... its 'future dividend reserves,' Judge Hernan Papa said in the ruling, a copy of which Siderar sent to the Buenos Aires Stock Exchange.
Siderar which is majority owned by Ternium SA, said it will appeal the decision, which marks a victory for the government of President Cristina Fernandez. The company said in a statement it would take swift legal action to defend its rights.
A dispute erupted between the steelmaker and Mrs Kirchner’s administration last month after the company resisted the government's choice to represent the Anses state pensions’ agency on the company's board of directors.
The Anses holds stakes in 42 companies as a result of President Cristina Fernandez's 2008 nationalization of private pension funds.
Soon after Siderar rejected the government's nominee to sit on its board, Mrs. Kirchner signed a decree to scrap a rule limiting the state to holding just 5% of voting rights on company boards, even when its stakes were greater.
The Anses holds a 26% stake in Siderar, which has challenged the government decree in court.
Shares in Siderar, which is controlled by Argentina's Techint conglomerate and has steel operations in Mexico and Argentina, have been suspended from trading on the Buenos Aires Stock Exchange due to an order by the securities regulator.
The collision course was emphasized when the Techint Group announced it was willing to buy the Argentine government’s 26% stake in Sidecar SAIC.
“We are willing to buy” the Argentine pensions’ agency stake, said Ternium chairman Paolo Rocca, whose family controls Technint, according to reports in Buenos Aires daily La Nacion.
Techint has filed a legal complaint against the Argentine government’s decree that allows the government to exercise full voting rights in companies in which it holds shares.