Grupo Elektra, controlled by Ricardo Salinas Pliego, has been removed from Mexico’s benchmark stock index after its shares were halted for weeks, a suspension pushed by the company to stop an alleged multi-million dollar fraud.
The elimination of the Price and Quotation Index (IPC) – which tracks the largest shares on the Mexican Stock Exchange – adds to the problems of the businessman, who is seeking to recover 7.2 million shares that he says he offered as collateral for a loan.
Salinas Pliego has said he is taking legal action because the lender rejected his attempts to repay the money, but the lender has said one of the businessman’s companies defaulted on a $110 million debt. Elektra shares were delisted from the Mexican Stock Exchange on July 26 after plunging as much as 10 percent.
The company said at the time that it had learned of a possible fraud by the depositaries of its shares, which could trigger unusual movements in the price of Elektra shares.
The lender, Astor Asset Management, has denied wrongdoing. Yesterday, the National Banking and Securities Commission granted an extension of up to 40 business days for Elektra shares to remain suspended. Normally, the removal of the IPC would be expected to lead to a sell-off of shares as funds that track the index adjust to the change. But the suspension of the business group’s shares will complicate that process.
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