Mexico's Salinas to win approval for U.S. delisting
Fri May 27, 2005 05:16 PM ET
By Cyntia Barrera Diaz
MEXICO CITY, May 27 (Reuters) - Mexican billionaire Ricardo Salinas, facing fraud charges in the United States, is likely to win approval next week to delist his companies from Wall Street and avoid further scrutiny by U.S. regulators.
Salinas, who built his empire by selling cheap household goods to the masses, was charged in January with fraud by the U.S. Securities and Exchange Commission for his role in a debt deal that earned him $109 million.
The SEC wants to fine Salinas, 49, if he is found guilty and forbid him from managing any U.S.-listed company.
But Salinas will probably preempt such a ban by delisting his broadcaster TV Azteca (TZA.N) , retailer Elektra (EKT.N) and cellphone firm Iusacell (CEL.N) from U.S. markets.
"The SEC would be out of the picture if the (TV Azteca) ADRs delist," said analyst Xavier Escala with Banif Investimento.
The plan by Salinas, which will be voted on at separate meetings of the three companies next week, is expected to pass despite opposition from minority shareholders because he holds controlling stakes in all three companies.
"Unlike other meetings in the past, many (minority) clients have asked for passes to attend next week," said a Mexico City-based analyst covering TV Azteca (TVAZTCACPO.MX) .
"This is clearly suggesting that they will vote against Salinas. But the voting power is in his hands and even if they disagree, he can still pass the initiatives," he added.
TV AZTECA
In the case of TV Azteca, Salinas will first seek to change company by-laws at a shareholders meeting on Monday to reduce the minimum attendance and voting requirements to guarantee the delisting proposal will pass at a second meeting on June 1.
"We view the first meeting as laying the ground to make the delisting possible," Escala said. "Shareholders could employ legal tools to delay holding the meeting. However, these remedies only delay the eventual outcome, not change it."
TV Azteca is by far the most visible of all Salinas' companies. He controls 59.8 percent of the broadcaster's capital. He also has majority stakes in Elektra and Iusacell .
The SEC's case against Salinas included the first false certification charge brought by the securities watchdog against a foreigner under the 2002 Sarbanes-Oxley reforms.
But five months after bringing charges against Salinas for his role in a controversial debt deal at his cellular company Unefon (UNEFONA.MX) that netted him $109 million, the trial against him has yet to start.
Prosecutors are still gathering evidence and some analysts do not expect a verdict until September.
The SEC originally charged Salinas, two other TV Azteca executives and the company itself. One of the executives settled and paid a fine of $200,000 but Salinas denies the charges. |
