updated 7/8/2008 7:24:49 PM ET 2008-07-08T23:24:49

Ecuador's government seized three television stations and nearly 200 other businesses on Tuesday for debts stemming from a bank failure in the 1990s. The economy minister resigned hours before the takeover.

In raids backed by dozens of police, a state agency that protects depositors in failed banks took over TC Television, TC Noticias and Gamavision stations, along with dozens of insurance, construction and real estate businesses owned by the Isaias Group. The companies were allegedly linked to bankers facing embezzlement charges after the 1998 collapse of Filanbanco bank.

The government of leftist President Rafael Correa said the 195 seized companies owe the country millions and the move gives hope that thousands of depositors could recover the money they lost when the bank collapsed.

But representatives of the stations called the seizures an attack on freedom of the press. The television stations are operated by relatives of fugitive Filanbanco bankers William and Roberto Isaias, who fled to the U.S. and are charged with embezzlement in Ecuador.

Gamavision president Alvaro Dassum, a cousin of the two bankers, issued a statement saying Gamavision has nothing to do with Filanbanco and has no business links to the bankers. "I protest and reject this arbitrary seizure."

Estefano Isais, brother of the ex-bankers and proprietor of seized TC Television, said in an interview that the seizure of media outlets is a way to control the press.

"We are living in a dictatorship," he said.

Economy minister resigns
Immediately before the takeover, Economy Minister Fausto Ortiz resigned and was replaced by Wilma Salgado.

Ortiz could not be reached for comment. But Jose Toledo, TC Television's new vice president for news, said Ortiz resigned because he opposed the takeovers.

Salgado said Ecuador wants to pay "social debt and not continue submitting the population to the dictatorship of international financial markets."

Correa said the media outlets and companies would likely be auctioned off to repay depositors who lost money when the Isaias' bank failed.

The deposit agency's manager, Carlos Bravo, said the government was not trying to silence the press and hoped the stations would be returned to private ownership "as soon as possible."

But state television President Enrique Arosemena, who was placed in charge of the seized stations, said the seized stations "are going to have a new editorial line, like all channels have, depending on their administrators."

Ecuador is asking the United States to extradite the Isaias, who are charged with embezzlement in the collapse of Filanbanco, one of 21 banks that failed in a crisis at the end of the 1990s. Officials estimated losses of $661 million for Filanbanco alone.

Oscar Ayerve, president of the Filanbanco Shareholders Association, called the seizures "a positive sign" for creditors who lost money when Filanbanco went under.

"The fight has been for them to pay everyone, especially retired men and women, many of whom died without recovering their money," Ayerve told The Associated Press.

He said Filanbanco owes creditors about $350 million and 60,000 people lost money when the bank went under.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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