Venezuela’s largest private steel company says it will take legal action against President Hugo Chavez’s plan to nationalize it.
The Sidetur company’s board of directors issued a statement Monday urging the government to consider the impact of the measure on Sidetur’s nearly 2,000 employees.
President Chávez announced Sunday the expropriation of Sidetur, alleging that it has been charging inflated prices for its products. Sidetur says it has been complying with state-issued price controls. The company, formally known as Siderurgica de Venezuela SA,, produces about 40 percent of the steel rods used for construction in the oil-rich country.
Chávez said Sunday that the government will pay fair compensation for the takeover.
In recent weeks, the Venezuelan president has ordered the nationalization of Agroislena CA, a leading farm supply business, and of Owens-Illinois Inc., a U.S.-based glass container manufacturer.
The leftist leader has nationalized much of Venezuela’s economy since he took power in 1999, saying he wants to improve the life of the country’s poor majority.
But critics say his policies are scaring off investors and will hamper Venezuela’s emergence from recession.