Argentina Government Wins Small Victory In Legal Battle With Siderar
27 Aprile 2011 - 4:33PM
Dow Jones News
Argentina's pension-fund agency, Anses, has received a favorable
court ruling in its battle to obtain a greater voice on the board
of steel company Siderar SA (ERAR.BA, SDDFF), according to the
Labor Ministry.
A judge has issued an injunction preventing Siderar from acting
on the resolutions, including the payment of 1.5 billion pesos
($367 million) in dividends, approved at the company's annual
general shareholders' meeting held on April 15, the ministry said
in a statement.
Anses has asked the courts to void the meeting.
Representatives of Ternium SA (TX), Siderar's parent company,
weren't immediately available for comment.
Industrial-conglomerate Techint, which controls Ternium and
steel-tube maker Tenaris SA (TS), and the administration of
President Cristina Fernandez have periodically sparred over her
economic policies aimed at fostering domestic employment and
production.
In February, the government invoked a 1970s supply law to
temporarily force steelmakers to roll back price increases. Last
year, the country's powerful truckers union and key ally of the
Fernandez administration blocked access to several of Siderar's
factories in a dispute over benefits.
The latest row stems from a presidential decree published
earlier this month that allows Anses to exercise its full voting
rights in the 42 companies in which it owns shares.
Anses became the country's largest institutional investor after
the government nationalized the private-pension system at the peak
of the 2008-2009 global financial crisis.
Prior to the decree, the agency's voting rights were capped at
5% regardless of its share ownership. Anses ownership exceeds 5% in
32 firms, and in 15 companies it has stakes of more than 20%.
At Siderar's annual shareholders' meeting, Anses voted against
the dividend payment and other resolutions proposed by the
company's board, while Siderar opposed an attempt by the agency to
exercise its 26% stake to place at least one representative on the
board of directors.
Securities regulator CNV subsequently declared the meeting void
on the grounds that it was plagued by "irregularity and
inefficacy." The meeting has been suspended until May 11.
Ternium has said it plans to challenge the CNV resolution and
the presidential decree in the courts.
Shares of Siderar traded on the Buenos Aires Stock Exchange fell
2.4% to close at ARS31.15 on Tuesday. Even so, the shares have
risen 6.7% since the decree was published April 13, while the
benchmark Merval stock index has fallen nearly 1% during the same
period.
Critics have questioned the president's decision to abolish the
voting cap by decree rather than seeking approval from congress.
The timing of the decree just six months before general elections
has also raised eyebrows.
The country's business elite have also reacted with
consternation to what many see as an unwanted intrusion by the
government in their affairs as they face demands for hefty wage
increases from pro-government unions.
The powerful industrial trade group, UIA, has urged the
administration to reconsider the move, though at the same time
hinted it is open to a negotiated settlement.
Economy Minister Amado Boudou and Anses President Diego Bossio
have said the government's intentions are benign and that the
pension agency only stands to benefit if its investments are
profitable.
-By Ken Parks, Dow Jones Newswires; 54-11-4103-6740,
ken.parks@dowjones.com