Papel Prensa

Papel Prensa S.A.

Company type	Public-private partnership
Industry	Newsprint manufacturing
Founded	July 12, 1972 (1972-07-12)
Headquarters	Argentina
Area served	Argentina
Owner	Clarín Group (49%), La Nación (22.49%), Argentine government (28.08%)

Papel Prensa S.A. stands as Argentina's foremost manufacturer of newsprint, catering to 58% of the national market. This public-private enterprise became a central issue during the 2010 disputes involving the Clarín Group and the Kirchnerist administration.

The company's ownership is split among the Clarín Group with 49%, La Nación holding 22.49%, and the Argentine government possessing 28.08%.

Formation

The origins of Papel Prensa trace back to 1969 when President Juan Carlos Onganía established the Paper and Cellulose Production Development Fund. The program sought to replace imported newsprint, which, apart from Papelera Tucumán, met nearly all of Argentina’s yearly requirement exceeding 340,000 metric tons. At that period, Argentina's 179 daily newspapers collectively reached a readership of approximately 4.3 million, ranking second in Latin America.

This fund introduced a decade-long 10% excise tax on imported newsprint, during which the state maintained an ownership stake in the company. A tender held in 1971 did not fulfill the capacity needs, leading to the Ministry of Industry taking over construction responsibilities. Officially founded on July 12, 1972, Papel Prensa was initially owned 27% by the government, with the remaining shares held by a consortium led by publisher César Civita and Editorial Abril.

In late 1973, Civita and Editorial Abril divested their shares to a group headed by banker David Graiver, who emerged as the principal private shareholder through his associate Rafael Ianover. Graiver acted as an investment banker for the Montoneros guerrilla faction and was alleged to have laundered US$17 million derived from their illegal operations. By 1976, Graiver controlled substantial interests in key media outlets such as Jacobo Timerman’s La Opinión, alongside various ventures within Argentina and internationally.

Graiver amassed debts totaling US$67 million and reportedly perished in a plane crash near Acapulco on August 7, 1976. In 1978, Manhattan district attorney Robert Morgenthau charged him with embezzlement, suspecting he might still be alive.

Transaction and dispute

Following these events, his widow Lidia Papaleo returned to Argentina on September 16 but was subjected to pressure from the dictatorship to relinquish her family's shares in Papel Prensa; Rafael Ianover faced similar demands. Papaleo also endured intimidation from the Montoneros who aimed to reclaim the US$17 million invested by Graiver. A military court sentenced Papaleo and Graiver’s family members to 15 years imprisonment; however, an appellate court subsequently exonerated them.

On November 2, Papaleo and other private stakeholders entered negotiations to sell their shares to leading Argentine newspaper publishers at that time: Clarín, La Nación, and La Razón. Papaleo had received only US$7,000 when she was unlawfully detained on March 14, 1977 by Buenos Aires Province Police. During state receivership that ended in January 1978, Papel Prensa—then inactive—was infused with substantial capital. Its San Pedro facility commenced operations on September 27, replacing roughly US$90 million worth of annual newsprint imports. Ultimately, private shareholders were compensated during President Raúl Alfonsín’s administration in 1985.

In 2000, Clarín Media Group purchased La Razón along with its Papel Prensa shares, raising its holding to 49%, while the Argentine government maintained a 27.5% stake. Together Clarín and La Nación represented 71% of Papel Prensa’s sales in 2011. Although newspaper circulation has diminished since the 1970s, Papel Prensa’s output remained insufficient for Argentina’s approximately 170 dailies; newsprint imports were about 80,000 tons annually in 2011. Production at Papel Prensa also declined: its San Pedro plant yielded 170,000 tons of newsprint (covering 75% of the Argentine market) in 2009 but decreased to 145,000 tons (58%) by 2011.

Renewed allegations

During the political tensions involving Clarín and Kirchnerism, Papaleo testified in 2010 that she had received threats from Clarín executive Héctor Magnetto amid the Papel Prensa sale and claimed she was allegedly subjected to police torture to relinquish additional payments and her remaining shares. The federal government pressed charges asserting illegalities in the transaction, which company officials argued was an effort to gain control over major newspaper outlets. Shortly afterward, Papaleo withdrew her initial statement, clarifying that although she felt pressured, she was not coerced when selling her shares. This position was corroborated by Isidoro Graiver (her brother-in-law) and María Sol Graiver (their daughter). Conversely, her brother Osvaldo Papaleo asserted the sale occurred under death threats and attributed the retractions to hidden agendas.

Both Clarín and La Nación rejected these accusations, highlighting that earlier inquiries following the return of democracy in 1983 found no connection between the Gravier family kidnappings and the sale, nor any irregularities in the process. At that time, Lidia and Osvaldo Papaleo along with Rafael Ianover testified without referencing these allegations. Bartolomé Mitre (director of La Nación) and Héctor Magnetto (CEO of Clarín) accused the Secretary of Human Rights of modifying the 1988 court ruling to imply favoritism by the Junta towards their newspapers. For instance, a period in the original text was reportedly replaced by a comma with added wording suggesting a single buyer was imposed by authorities.

These controversies occurred alongside a politically charged six-month labor strike at the San Pedro facility, amid allegations of excessive executive compensation. The strike concluded in December after agreements on salary increases were reached.

In 2016, Judge Julián Ercolini acquitted Magnetto, Mitre, and Noble due to lack of sufficient evidence supporting misconduct.

Expropriation bill

Following the FPV's attainment of a legislative majority in 2011, it introduced legislation to nationalize Papel Prensa, currently owned by Clarín and La Nación, justifying the move by emphasizing the strategic importance of newsprint manufacturing and distribution. The proposed law sought to grant the government authority to obtain a majority share in Papel Prensa and oversee the importation of paper products. Nonetheless, opposition factions opposed the measure, contending that it violated constitutional principles and was designed to subtly limit press independence.