Argentina's navy chief loses job over seizure of ship in Ghana

Argentina has replaced its navy chief as it investigates the seizure of a frigate in Ghana by bondholders who say they will not release the vessel until the South American country repays money owed to them after its 2002 debt default.

The Defence Ministry replaced navy chief Carlos Alberto Paz soon after removing two other senior officials as part of a probe into who was responsible for the ill-fated decision to stop in Ghana, a Ministry statement said on Monday.

The Libertad, a training frigate tall ship with about 300 crew on board, was detained in the port of Tema on October 2 under a court order obtained by NML Capital, an affiliate of investment firm Elliott Management.

The firm says Argentina owes it more than US$300 million on a defaulted debt and it will only release the ship if the country pays it at least US$20 million. President Cristina Fernandez de Kirchner's government condemned the ship's detention, saying it could not be targeted by creditors due to its military nature.

A Ghanaian court ruled that Argentina forfeited such immunities when it issued the bonds.

Fernandez dispatched several senior officials to Accra to resolve the stand-off as recriminations mount over why Ghana was included on the vessel's tour of the region.

Argentina declared a massive sovereign default a decade ago at the height of an economic crisis and now faces a raft of lawsuits in US courts by so-called holdout bondholders seeking state asset freezes to recover the value of defaulted bonds.

The bondholders, which the Argentine government calls vulture funds, normally target foreign bank accounts held by state-run companies or government agencies.