Court overturns TI anti-trust ruling

29 Jul 2009

An Argentine court has accepted an appeal filed by telecoms company Telecom Italia (TI) to exercise its voting rights at its Argentine unit Telecom Argentina, according to Reuters. In April 2009 Argentina’s anti-trust agency, the National Commission for the Defense of Competition (CNDC), ruled that TI’s directors be stripped of their voting powers in incumbent Telecom Argentina and ordered the directors of Telecom Argentina and related companies to revoke all decisions made by the board of directors after 9 January 2009. A subsequent appeal by TI was rejected by the CNDC, forcing the Italian telco to take the matter to court.

According to TeleGeography’s GlobalComms database, TI has considered selling its stake in Telecom Argentina due to the anti-trust investigation. The CNDC is currently considering a case to determine if TI’s 50% stake in Sofora, the holding company that controls Telecom Argentina, threatens competition in the local telecoms sector. In November 2008 Argentina ruled that Telefonica’s 24.7% stake in TI, bought in October 2007, violates anti-trust laws. 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. TI has also been locked in a lengthy battle with Werthein Group to increase its stake in Sofora. The CNDC has barred TI from exercising its call option on Werthein Group’s Sofora shares, which vested at the end of 2008.