Chavez threatens to nationalize banks, steel producer

Venezuelan President: "Private banks have to give priority to financing the industrial sectors of Venezuela at low cost."

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May 4, 2007 01:18
1 minute read.
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Venezuelan President Hugo Chavez on Thursday threatened to nationalize the country's banks and largest steel producer, accusing them of unscrupulous practices. "Private banks have to give priority to financing the industrial sectors of Venezuela at low cost," Chavez said. "If banks don't agree with this, it's better that they go, that they turn over the banks to me, that we nationalize them and get all the banks to work for the development of the country and not to speculate and produce huge profits." It was not clear if Chavez was only referring to Venezuelan banks including Mercantil Servicios Financieros CA and Banco Provincial SA, or if he was also threatening major international banks with subsidiaries in the country, such as New York-based Citigroup Inc. and Spain's Banco Bilbao Vizcaya Argentaria SA and Banco Santander Central Hispano SA. Chavez also warned the government could take over steel producer Sidor, which is majority controlled by Luxembourg-based Ternium SA. Shares of Ternium were down 4.9 percent in US trading after Chavez's comments. Sidor "has created a monopoly" and sold the bulk of its production overseas, forcing local producers to import pipes and other products from China and elsewhere, Chavez said. "If the company Sidor ... does not immediately agree to change this process, they will obligate me to nationalize it," Chavez said. "I prefer not to," Chavez added, as he ordered Mining Minister Jose Khan to immediately head over to Sidor's headquarters and come back with a recommendation with 24 hours. "Sidor has to produce and give priority to our national industries ... and at low cost," he said. Chavez initiated a nationalization drive in January that is bringing the country's largest telephone company CANTV and the electricity sector under state control. The state oil company on Tuesday took over the last privately run oil operations in the country from major international oil companies on Tuesday. Chavez, a close ally of Cuban leader Fidel Castro, says the nationalization of "strategic" companies are part of Venezuela's transition to a socialist system. "I'm not deceiving anyone," Chavez said. "I'm only governing the country, and the country has elected me various times. ... All of those who voted for me backed socialism, and that is where we are heading."

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