Venezuela Chavez Backs Government Takeover Of Food Co Assets Close

No virus found in this outgoing message. Checked by AVG Anti-Virus. Version: 7.0.344 / Virus Database: 267.11.6/111 - Release Date: 9/23/2005

 Venezuela Chavez Backs Government Takeover Of Food Co Assets Close

Venezuela Chavez Backs Government Takeover Of Food Co Assets

CARACAS -(Dow Jones)- Venezuelan President Hugo Chavez said Tuesday that a state government could begin expropriation procedures for the recently seized grain storage facilities of Alimentos Polar, Venezuela's largest food company.

"Now the state governor has the ability to expropriate" those assets, Chavez said. "Polar bought (the silos)...they stripped the plant and took the equipment to another country," he said.

Polar's assets include grain-storage silos and two buildings that housed former flour and cooking oil processing plants. The company reportedly shut those operations, but continues to operate the grain-storage facilities.

"Owners usually close down companies, they take the money and leave behind debts. That's an abuse of the law and of the Venezuelan people," Chavez said.

A military contingent took over the Polar silos earlier this month, forcing the company to suspend operations in those facilities. Polar officials and private-sector leaders denounced the move as a violation of laws approved by the Chavez government.

Agriculture ministry officials and company representatives are said to be negotiating a resolution to the problem.

The government seized and expropriated assets of two failed companies earlier this year after lawmakers approved a resolution declaring those assets of "public interest."

Polar officials pointed out that, in their case, lawmakers haven't produced any resolution that would warrant a takeover.

Chavez has warned companies that they must continue producing, or risk being taken over by government. If they don't produce, the government can do it for them, Chavez argued.

-By Raul Gallegos, Dow Jones Newswires; 58-414-288-7461; raul.gallegos@dowjones.com