Ecuador seizes TV stations, companies

By Gonzalo Solano | Tuesday, July 8, 2008

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QUITO, ECUADOR (AP) — Ecuador's government seized three television stations and 195 businesses on Tuesday to collect debts stemming from a bank failure in the 1990s. The economy minister resigned just hours before the takeover.

In raids backed by dozens of police, Ecuador's state banking agency took over TC Television, TC Noticias and Gamavision stations, along with dozens of insurance, construction and real estate businesses owned outright or in part by Quito's Isaias family.

Isaias brothers William and Roberto, both bankers, are now facing embezzlement charges linked to the 1998 collapse of Filanbanco, once one of Ecuador's biggest banks.

Leftist President Rafael Correa said the seized media outlets and Isaias companies owe the government millions of dollars and will likely be auctioned off to repay depositors who lost money when Filanbanco failed.

The three TV stations are operated by relatives of fugitives William and Roberto Isaias, who fled to the U.S. after the bank collapsed. Ecuador has asked the U.S. to extradite them.

Filanbanco was one of 21 banks that failed in a broad banking crisis that shook Ecuador in the late-1990s. Officials estimate Filanbanco's losses alone total $661 million.

Representatives of the TV stations called the seizures an attack on press freedom.

Gamavision president Alvaro Dassum, a cousin of the two bankers, issued a statement saying Gamavision has nothing to do with Filanbanco and has no business ties to the bankers. "I protest and reject this arbitrary seizure," he said.

Estefano Isaias, the ex-bankers' brother and proprietor of seized TC Television, accused the government of trying to control the media.

"We are living in a dictatorship," he told The Associated Press.

Ecuador Economy Minister Fausto Ortiz resigned immediately before the takeover and was replaced by state banking agency head Wilma Salgado, who suggested Tuesday that Ecuador may not continue paying its sovereign debt.

"We're interested in paying our social debts and not submitting the population to the dictatorship of international financial markets," she said.

Ortiz could not be reached for comment, but TC Television's vice president for news, Jose Toledo, said he had resigned because he opposed the takeovers.

The three, mid-size national TV networks include one 24-hour cable news channel and two open-signal stations, which have much greater penetration in Ecuador, where only 5.4 percent of the population receives cable. The latter two networks had often invited Correa and various ministers to appear as guests in recent months.

Ecuador's two largest television networks, which are much more critical of the government, are still privately operated.

State television President Enrique Arosemena, who was placed in charge of the seized stations, said they "are going to have a new editorial line, like all channels have, depending on their administrators."

But state banking agency chief Carlos Bravo said the government does not intend to silence the press, adding that he hoped the stations would be returned to private ownership "as soon as possible."

Oscar Ayerve, president of the Filanbanco Shareholders Association, called the seizures "a positive sign" for 60,000 creditors who lost about US$350 million when Filanbanco went under.

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