According to the Wall Street Journal, Argentina’s anti-trust agency, the National Commission for the Defense of Competition, has ruled that Telecom Italia’s (TI’s) directors be stripped of their voting powers in the company’s local subsidiary, Telecom Argentina. The agency has ordered the directors of Telecom Argentina and related companies to revoke all decisions made by the board of directors after 9 January 2009. TI’s chief executive Franco Bernabe has called the ruling ‘completely unfounded,’ adding that it strongly damages TI’s interests.
The decision follows a ruling in November 2008 that Spanish telco Telefonica’s minority stake in TI violates Argentinean anti-trust laws. An investigation was opened after Telefonica joined a consortium that acquired a 24.7% stake in TI in October 2007. TI owns a 50% stake in the Sofora holding company that controls Telecom Argentina. When Argentina’s telecoms sector was privatised in the 1990s its fixed line services were divided between Telecom Argentina and Telefonica de Argentina, with a government directive stating that there should be no cross-ownership between the two.