26 November, 2009
Argentine gov't, Grupo Clarin row takes new turn
* Government calls for investigation of newsprint supplier
* Grupo Clarin holds largest stake in company
* Tensions rise between government and Grupo Clarin
By Patricia Velez
BUENOS AIRES, Nov 26 (Reuters) - A call by the Argentine government for an investigation into a newsprint paper company is escalating a battle between President Cristina Fernandez and one of Latin America's biggest media groups.
Economy Minister Amado Boudou asked lawmakers this week to probe possible irregularities at leading newsprint supplier Papel Prensa (PPR.BA), fueling opposition charges that the government eventually plans to nationalize the company.
The move was the latest salvo between Fernandez and Grupo Clarin (CLA.BA)(GCSAq.L), owner of the country's biggest newspaper Clarin and the most-watched cable news channel.
Tensions have risen for more than a year after government officials accused Clarin of excessively critical coverage of Fernandez.
The Argentine leader is suffering from low popularity ratings of about 20 percent, weighed down by her confrontational style and a slowing economy.
In September, Fernandez pushed through a media reform law that she said would bring more competition to the media sector, but critics said it aimed to force Clarin to sell off some of its media outlets.
Boudou called for a congressional inquiry into the finances of Papel Prensa. Clarin, which owns newspapers, television and radio stations along with cable and Internet access companies, is the leading shareholder in Papel Prensa, while the government and another newspaper company, La Nacion, also hold stakes.
"We want to analyze whether the majority partner has used the company for its own benefit," Boudou said. The government also wants to know if Clarin, through Papel Prensa, has been obtaining paper at below-market prices, he said.
STATE INTERVENTION
Some Fernandez opponents said the government appeared to be laying the groundwork for a possible state takeover of the company, a charge the government denies.
"I think that's what they're aiming to do," said Silvana Guidici, a congresswoman from the opposition Radical party.
Fernandez's predecessor and husband, former President Nestor Kirchner, increased state intervention in the economy. Last year, Fernandez nationalized Argentina's private pensions funds and the country's biggest airline.
A state takeover of Prensa Papel would allow the government to manage paper supplies for newspapers, giving it influence over media companies, said Pablo Sirven, author of a book that examined the relationship between the press and former Argentine President Juan Peron.
"They want to control the paper quotas," he said. Controlling how much paper Clarin receives could impact the price the company pays for paper and its circulation.
Kirchner has repeatedly criticized Clarin in public, calling it a "monopoly."
Clarin has responded with more negative coverage of Fernandez and in-depth investigations of corruption allegations involving government officials.
On Wednesday, Kirchner lashed out at the company saying it was intentionally publishing negative news about Fernandez's government.
"We're being extorted and threatened in the worst way. There's not one bit of truth in what that monopoly says is going on in Argentina," he said.
Grupo Clarin officials did not immediately comment.
(Writing by Kevin Gray, Editing by Stacey Joyce) ((kevin.gray@reuters.com ; +54 11 4510-2505; Reuters Messaging: kevin.gray.reuters.com@reuters.net))
Source: http://www.reuters.com
Argentine gov't, Grupo Clarin row takes new turn Added: (26.11.2009)
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