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Another private company confiscated in Venezuela

By Veneconomy

30.04.05 | Constructora Nacional de Válvulas, a medium-sized private company with many years’ experience in the production of valves for the oil industry, was confiscated this week by the Venezuelan government. The company, owned by a former president of PDVSA, has now joined the long list of private property that has been arbitrarily turned over to the State.

Once again, they resorted to the same old legal stratagem of claiming it to be a matter of “public and social interest.” Now the company will be run by a group of shareholders made up of government representatives (51%) and former workers (49%), using the same mechanism employed in the “expropriation” of the company formerly known as Venepal, now Invepal. The story behind this confiscation started back in 2002, when, during the national strike, Constructora Nacional de Válvulas had to shut up shop, not so much in support of the strike, but because there was no one at PDVSA authorized to receive the valves.

Later, when they tried to start up production again in February 2003, a group of five recently hired workers, who were also members of the Bolivarian trade union, closed the company and prevented owners, employees and workers from entering. The owners took the matter to court and to the labor inspectorates, who issued an order to reopen the plant. However, the police were not capable of dealing with this small group of workers or of opening the plant. Finding itself unable to resume operations, the company paid off all its employees, except the five workers who had paralyzed the company for two years. So, the claim that the company had a huge debt with its workers, which was used to justify the “expropriation,” is completely unfounded.

The case of Constructora Nacional de Válvulas is much more serious than what happened with Venepal. This company was not bankrupt, as Venepal was; it was a going concern and had no debts. What is more, the owners wanted to continue operating. The problems started when a group of government sympathizers provoked the closing of the company. The government took grossly unfair advantage of the situation and used its legal power to get rid of yet another private investor.

This did not stop President Chávez from making a great song and dance over the “expropriation” of Constructora de Válvulas on his Sunday show “Aló Presidente” this week, as though he were announcing the successful outcome of some social claim. The fact of the matter is that this is another step towards the eradication of private property in Venezuela and the biggest forced transfer of private wealth from one group to another in the country’s history. It is a repeat performance of what happened in Cuba in the 60s and in Nicaragua and Zimbabwe in the 80s.

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