Shareholders vote 99.85% in favor of move
MEXICO CITY — Shareholders in TV Azteca, led by topper Ricardo Salinas Pliego, voted on Wednesday evening to delist from the New York Stock Exchange, putting the troubled net beyond reach of U.S. regulators.
The vote, 99.85% in favor, was closely echoed by stockholders in two other Salinas-controlled companies, retailer Elektra and telco Iusacell, both of which will cease trading on the Big Board.
The NYSE is expected to halt trading of the three companies in 30 days, with delisting in 60 days.
Moves, anticipated for nearly a month, are a direct reaction to an upcoming trial of Azteca, Salinas and two other company officers in U.S. District court.
Earlier this week, the three companies changed their bylaws to ensure passage of the vote; Salinas, infamous for his maverick management style, holds a sizeable majority of voting stock in all three.
In January, the Securities and Exchange Commission filed civil fraud charges, alleging that Salinas made $109 million in profit from a 2003 debt deal involving telco Unefon, in which Salinas held a minority share.
The charges claim that Salinas did not disclose his role as a middleman in the deal and thus defrauded shareholders, as well as violating the Sarbanes-Oxley act, the first foreign entity to be charged under that the laws.
The U.S. trial, originally set for February, has been postponed twice and is expected to begin in July.
Salinas has publicly maintained his innocence. If found guilty, he will face stiff fines and a ban on being a director of any company publicly traded on U.S. markets. By delisting Azteca, he is safeguarding his position at the top of the broadcaster.
Mexico’s securities regulator has already closed its case against Azteca and Salinas, handing down fines amounting to $2.5 million at the end of April.
However, stock analysts are concerned about the decision to delist from the NYSE, as it is likely to hit the already badly declined value of Azteca stock.
Azteca said that future investment capital could be generated on Mexican markets or through its own cash flow.
Shares in TV Azteca, which started the year at just over $10 each, have dropped to as low as $7.77 and on Wednesday closed at $8.38.
Shareholders have voiced their displeasure, many filing civil suits against the company, but due to Salinas’ dominant voting position they are essentially powerless.
Azteca maintains that the decision to delist is not to protect Salinas. Instead, in a Wednesday night release, net said it was taken “after an analysis and discussion of the costs and benefits” of trading on U.S. capital markets.