Mexican businessmen denounce take-overs

Press, 8 September 1982, Page 9

Mexican businessmen denounce take-overs

NZPA Mexico CityPrivate business leaders in Mexico’s second biggest industrial and financial centre yesterday called on all firms here to close for a day tomorrow to protest against what they said was a slide towards socialism in Mexico. Advertisements in newspapers in the northern city of Monterrey asked all businesses except hospitals and pharmacies to close as a sign of opposition to the recent Government take-over of private domestic banks. "It started this way in Cuba and Nicaragua and today they have lost all their liberties,” the advertisements said. They were signed by 48 associations ranging from business and industry organisations to civic groups. The nationalisation seriously hit Monterrey businessmen, who had owned eight of

the 33 largest private banks, including Banca Serfin. the third largest in the pountry with about SUS 3 billion in assets.

In addition, four of the five biggest fully Mexican-owned industrial conglomerates are based there, including Grupo Industrial Alfa, the biggest in Mexico.

Monterrey has long been the bastion of conservative business leadership. Its leaders have not hesitated in the past to shut down business in political protest, most recently against the 1976 Government expropriation of rich northwestern farmland. Meanwhile the Mexican President (Mr Jose Lopez Portillo) hoisted his nation’s flag atop the headquarters of the Bank of Mexico in a gesture symbolising the first day of State-controlled banking.

There were long lines at

banks in the capital for the start of business but no early sign of panic withdrawals, as had been feared by some Mexican officials. Mexico has devalued its peso and introduced exchange controls in recent weeks after running out of money to continue repaying its foreign debt, which, at an estimated $BO billion for both public and private, is the world's biggest. Selling dollars is forbidden and visitors must change their money at the banks. An illegal black market is expected to emerge once the authorities’ initial vigilance slackens.

The Government has also raised interest rates on savings deposits from 4.5 per cent to 20 per cent, officially to protect the saver. Financial sources said it was to help prevent a run on the peso. Trades union posters on

the former private banks, now draped with the national flag, urged the workers to co-operate and explain the new measures to clients. In Toronto the Mexican Finance Minister (Mr Jesus Silva Herzog) said that Mexico would pay only interest on its public sector foreign debt until the end of next year. The total repayment would amount to SNZI9 billion. Mexico recently reached agreement with more than 100 foreign banks to delay by 90 days repayment of principal of about SNZI4 billion. But there was no word of what would happen after that grace period expired. Mr Silva Herzog was quoted as saying that Mexico's decision last week to nationalise its banks might delay agreement on some SNZS.S billion in financing from the I.M.F. by a few. weeks '