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Argentina Closes Clarin Internet Unit in `Totalitarian' Attack on Company
Argentina’s government shut down the Internet service provided by Grupo Clarin SA’s Fibertel unit, saying the company’s merger with Cablevision SA was illegal.
The move is the latest in a fight between Clarin and President Cristina Fernandez de Kirchner, which says Argentina’s biggest media company is biased in its coverage of the government. The media company also owns the newspaper Clarin, the most-read Spanish-language daily in Latin America.
Cablevision, in a statement, accused the government of acting in a “totalitarian” manner.
“Fibertel doesn’t exist anymore because of its own decision,” Planning Minister Julio De Vido said in a news conference today in Buenos Aires. “They announced a merger that was never approved.” Fibertel customers are free to find other service providers and the company will cease operations within 90 days, De Vido said.
The government’s decision is “illegal and arbitrary,” and Cablevision will pursue all legal actions to continue with Fibertel’s internet service, the company said in an e-mail statement.
“This is a new and serious chapter amid an increasingly totalitarian series of attacks by the government against companies owned by Grupo Clarin,” Cablevision said.
About 63 percent of Grupo Clarin’s 1.87 billion pesos ($470 million) in sales in the second quarter came from its cable and internet services, according to the company’s earnings report. Fibertel has about 1 million clients, the company said.
Clarin shares fell 5.8 percent to 12.3 pesos at 3:59 p.m. New York time, the most since September 2009. The shares have climbed 31.7 percent this year, compared with a 4.7 percent rise on the benchmark Merval index.
To contact the reporter on this story: Eliana Raszewski in Buenos Aires at eraszewski@bloomberg.net
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