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Wednesday, August 06, 2008

Ecuador orders seizure of more Isaias assets

QUITO, Aug 4 (Reuters) - Ecuador on Monday ordered the seizure of shares owned by the local Isaias business group in 58 companies, including stakes in two newspaper publishers, because of a debt dispute with the state, the government said in a statement.

The seizure follows a mass confiscation in July of businesses owned by the Isaias group, which is linked to a decade-old banking crisis that led to millions of dollars in losses for the state and private depositors.

In July, the government seized nearly 200 companies, including two nationwide broadcasters, from Isaias, in a move popular with most Ecuadoreans that nonetheless worried media watchdog groups.

The government says the group owes the state about $660 million in losses the state incurred trying to salvage one of their banks from going under in the late 1990s due to mismanagement. The group has denied any wrongdoing.

A lawyer representing Isaias was not immediately available for comments.

Critics says the mass confiscation is part of a government move to muster support for a September referendum vote on a new constitution that bolsters President Rafael Correa's powers over the economy.

In a statement, the government did not specify how many shares the group holds in each company, but an official, who asked not to be named, told Reuters the shareholdings range from 1 percent to majority stakes.

A spokeswoman for the publisher of Quito daily Hoy said the Isaias group owns less than 1 percent of the company's shares. The government source confirmed that would be seized by the government.

The government also ordered the seizure of Isaias shares in the publisher of Quito daily La Hora, without saying how many shares. However, the newspaper's chief editor, Juana Lopez, said Isaias has no stake in its publisher.

Both newspapers have been critical of the government's leftist policies and handling of the economy.

The shares confiscated are from small companies not listed in markets. Companies range from real state firms to shrimp farms and a cable operator.

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