Bondholders losing confidence in Salinas
MEXICO CITY — Mexico’s TV Azteca topper Ricardo Salinas Pliego has sought legal protection against an insider trading charge here as American bondholders in his wireless phone company Iusacell demanded early repayment of $350 million in debt on Thursday.
The Bank of New York, acting as trustee, notified the company that an unspecified number of bondholders had requested acceleration of principal and accrued interest on debt due in December 2006. Azteca has not commented on the demand.
The bondholders’ move reflects failing confidence in Salinas, who is expected to go on trial in U.S. District Court in June for alleged fraud.
The case involves a 2003 debt refinancing that netted Salinas and TV Azteca board member Pedro Padilla nearly $220 million in undisclosed profits. Last week Azteca and execs including Salinas were slapped with $2.4 million in fines by Mexico’s securities regulator for fraud in the same case.
Mexico’s Finance Ministry lodged the insider trading charge, a criminal offense that carries a sentence of three to seven years in prison.
Salinas has filed for a special court order that would temporarily stay the charges against him and provide some measure of shelter from criminal prosecution here; if that court order is not approved, an order for his arrest could be issued immediately.