Local regulators wait in Azteca fraud case

MEXICO CITY — A full week after the Securities and Exchange Commission filed charges against Mexico’s media giant TV Azteca and chairman Ricardo Salinas Pliego, Mexican regulators remain ominously silent on the status of their fraud investigation.

The National Banking and Securities Commission (CNBV), Mexico’s equivalent of the SEC, has long maintained that it was probing Azteca for violations related to a 2003 debt transaction that resulted in a $109 million net gain for Salinas.

The SEC brought formal civil fraud charges against Azteca, Salinas and former CEO Pedro Padilla Longoria last week. Action led to sharp drops in Azteca stock, which trades in the U.S. and Mexico.

Yet the CNBV has made no formal charges and has given little indication of what course of action it is likely to take, leading to increasingly heated speculation among analysts and observers here.

“The authorities are waiting to see what the (Americans) do to Azteca, so they can then do something smaller,” speculated Jorge Fabre, head of the Mexican Center for Excellence in Corporate Governing. “They’re going to slap them on the wrist.”

The CNBV said Monday it was concluding formal investigations and would begin notifying Azteca executives of its course of action. But it did not say when those notifications would go out or what, if any, charges would be pressed.

In a press conference, Mexico’s tax secretary, Francisco Gil Diaz, who oversees the Mexican stock market, said a review of the securities activities of TV Azteca and all related companies was under way.

“Until these revisions are finished, until it can be established if there were irregularities, we cannot legally divulge more information,” he said.

While regulators take their time, Mexican media have been quick to point the finger at Salinas, plastering his face on front pages of newspapers and magazines. Banks and other financial institutions have followed, with several dropping their rating of Azteca stock.

Azteca issued a statement quoting Salinas last week that called the charges “false, in bad faith and discriminatory.”

The net said it could have settled with the SEC but chose to fight in court, arguing that as a Mexican company, Azteca is outside the commission’s jurisdiction.

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