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Saturday, September 06, 2008

Ecuador seizes more companies as debt payment

QUITO, Aug 27 (Reuters) - Ecuador seized more companies for payment of debt the government says it is owed, which could increase President Rafael Correa's popularity before a vote on a new constitution that would give him more power.

Correa sent police to take control of six companies owned by the Penafiel group as payment for millions of dollars Ecuador invested in a bank the group owned about 10 years. The bank subsequently closed.

The government also confiscated stakes held by the Penafiel group in 413 companies, including several gas stations.

A representative of the Penafiel family, which owns the group, was not available for comment.

One of the seized companies is oil services firm China Petroleum Technology and Development Corp Ecuador S.A. (CPTDC). On its website,, CPTDC is identified as a subsidiary of China's National Petroleum Corp (CNPC), the parent of listed PetroChina.

A spokesman for CPTDC was not available for comment.

Ecuadorean oil officials could not confirm if the company is affiliated with CNPC or if it had been bought by the Penafiel group.

CNPC is part owner of an oil consortium, Andes Petroleum, that extracts crude from several fields in Ecuador.

Other Penafiel companies that were seized include small oil service operators, the government said in a statement.

In July, at the behest of Correa, the government took over more than 200 companies, including two television stations, owned by the Isaias group. At the time, Ecuador said it was as payment for debts, which the group contested.

Pollsters say the government's actions have helped Correa muster votes before a September referendum on a new constitution that would bolster his powers over political institutions and the economy. He is inching closer to the 50 percent majority he needs to win the vote, recent surveys show.

Many Ecuadoreans support confiscation of the companies because people lost money when banks owned by business groups collapsed. The public has demanded that bank owners, some of whom fled the country after the collapses, be jailed.

The government has vowed to continue seizing companies owned by powerful business groups linked to a financial crisis that gripped the country about a decade ago. (Reporting by Jose Llangari and Alonso Soto; Editing by Phil Berlowitz, Toni Reinhold)

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