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"El Telégrafo" editor alleges government seeking control of newspaper in legal dispute over ownership

(IAPA/IFEX) - The following is a 4 June 2007 IAPA press release:

IAPA to keep watch on legal dispute over ownership of Ecuador's oldest newspaper

MIAMI, Florida (June 4, 2007) - The Inter American Press Association (IAPA) said today that it will keep a close watch on the legal battle between private and state shareholders of the Ecuadorean newspaper El Telégrafo in the hope that the dispute will be conducted transparently and according to due process.

Carlos Navarette Castillo, the paper's editor since 2002 and a descendant of the founders of the 123-year-old newspaper, complained that the government invalidated capital infusions made in 2002, 2004 and earlier this year in an attempt to strip the private shareholders of their subsequent majority ownership position.

The official regulatory body, the Office of Superintendent of Corporations, issued an edict reversing the capital increases and restored majority shareholder status to the national Deposits Guarantee Agency (AGD). Through this agency the Ecuadorean government began managing the newspaper a decade ago after freezing the assets of banker Fernando Aspiazu - the largest single shareholder of the newspaper at the time, currently in jail on charges of fraud in connection with the now defunct Banco del Progreso.

The two parties dispute the validity of the each other's actions. Navarrete argues that the increase in capital was made to save the newspaper from bankruptcy and accuses the government of abuse of power and wanting to take control of a news outlet. The Office of Superintendent claims the capital infusion - the equivalent of $700,000 - was unlawful; if upheld it would have raised the percentage of the stock owned by the private shareholders from 20 to 80 percent.

The IAPA, through its president, Rafael Molina, and chairman of the Committee on Freedom of the Press and Information, Gonzalo Marroquín, declared that, while respecting the role of the judiciary, it hoped the legal conflict would be conducted with complete openness and observance of due process.

IAPA officers, in response to statements by local officials that the government's intention is to end up owning the newspaper, added that the government should call for public bids as dictated by law in order to avoid contradicting international principles that govern freedom of expression and press freedom.

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