Venezuela President May Nationalize CANTV
CARACAS (AP)--President Hugo Chavez on Tuesday threatened to nationalize Venezuela's largest telecommunications company if it does not comply with a court order to make owed pension payments to former employees.
Chavez said he had given executives of Compania Anonima Nacional Telefonos de Venezuela, or CANTV, a "prudent" grace period to comply, but he did not specify how long that period would be.
"If they don't want to comply with that, I am going to nationalize CANTV," Chavez said in a televised speech.
Company officials could not immediately be reached to respond to the president's remarks.
Verizon Communications owns a 28.5% stake in CANTV, according to its last annual filing with the Securities and Exchange Commission. Spokesman Peter Thonis declined to comment on the situation.
Verizon recently traded at $34.25, down 14 cents, or 0.4%. CANTV was down 2% at $19.29 on the NYSE.
CANTV is Venezuela's largest publicly traded company, and has shares traded on both the Caracas and New York stock exchanges. It is the dominant provider of fixed-line telephone service in Venezuela, and also has large shares of the mobile phone and Internet markets.
The government holds some 6.6% of the company's shares, while workers control 7.4%.
In February, CANTV said it had increased the amount set aside to cover pensions to $387.4 million from $332.6 million in response to updated projections on the cost of funding pensions.
Chavez said Tuesday, however, the company still has not made proper payments to some former employees.
"It made me very ashamed that ... CANTV's retirees are still going around and they haven't paid them what CANTV should pay them," Chavez said. "CANTV is earning plenty. It's a private company."
The Venezuelan Supreme Court ruled in July 2005 in favor of more than 3,400 unionized workers in a long-running pension dispute with the company. The court said CANTV workers' pensions had to be increased to take into account currency devaluations, inflation and minimum wage hikes since 1999.
CANTV, a Caracas-based former state firm that was privatized in 1991, has said it will continue to adjust pensions whenever the government raises the minimum wage. It also has contested part of the court ruling and is awaiting a study from Venezuelan authorities to determine how much it will make in back payments to retired workers.
Chavez suggested the company could try to sway the court case through corruption.
"They get going to try to buy the judges," he said, "all those mechanisms of the cancer of corruption."
Chavez said he had asked his labor minister to call CANTV managers and make them aware of his position on the pensions.
"I gave a prudent period, and we will see what happens. We aren't asking anything of them, just that they pay people who have a right, who are retired," Chavez said. "They are still passing along to them a pittance in pensions, even though there was a decision by the Supreme Court."
(END) Dow Jones Newswires "
Posted to the site on 16th August 2006