Investors Accuse Ricardo Salinas of Fraudulent Share Freeze and Sham Privatization

July 23, 2025 (Mexico City) - A coalition of minority shareholders and investor advocates today issued a hardline statement accusing Mexican billionaire Ricardo Salinas Pliego of orchestrating a fraudulent freeze of trading in Grupo Elektra's shares to conceal massive losses - estimated at 11.6 billion pesos (approximately US $570 million) - and subsequently engineering a stock price collapse to facilitate a "sham" privatization behind closed doors that benefits only himself . The group calls on financial authorities to intervene immediately, urging Mexico's National Banking and Securities Commission (CNBV) to block any delisting of Grupo Elektra and imploring the Bank of Mexico (central bank) to condemn the clandestine buyout that has devastated countless investors.

Fraudulent Share Freeze Concealed Massive Losses

According to official records, trading in Grupo Elektra (BMV: ELEKTRA) - Salinas's flagship retail and banking company - was halted in July 2024 at the request of its controlling shareholder (Salinas), ostensibly due to an alleged fraud by one of Elektra's creditors . The company claimed that a creditor, Astor Asset Management 3 Ltd, had improperly disposed of over 7 million Elektra shares in a fraudulent scheme, prompting the Bolsa Mexicana de Valores (Mexican Stock Exchange) to suspend trading pending investigation . However, opponents argue that this extraordinary trading freeze was a manipulative scheme - a "fraudulent" ploy designed to mask Elektra's deepening losses and prevent a market collapse until Salinas could tighten his grip. In fact, internal filings show Elektra suffered a loss of 11.6 billion pesos in late 2024, directly tied to a failed maneuver to halt the freefall of its shares . Executives had attempted to prop up Elektra's stock price through aggressive interventions, but these efforts were seen by investors as insufficient or even reckless, ultimately accelerating the decline . By keeping the stock suspended in limbo for months, Salinas delayed the public revelation of the company's deteriorating value, a tactic that critics say cheated shareholders and the market of timely information.

When regulators moved to lift the trading suspension in late 2024, Salinas fought back to prolong the freeze, even obtaining a court order to block the resumption of trading . This led to a standoff between the billionaire and Mexico's financial authorities. CNBV officials ultimately intervened, overriding court injunctions obtained by Salinas's lawyers and ordering trading to resume on the open market . The result was a sudden and brutal market reckoning: when Elektra's stock finally reopened for trading in December 2024, its price immediately plunged by 70%, falling from around 945 pesos in July to nearly 190 pesos . This collapse wiped out an estimated US $5.5 billion of Salinas's personal fortune in a single day, roughly half his wealth, and inflicted catastrophic losses on ordinary shareholders who saw their investments vaporized overnight. It also forced Elektra to recognize the massive hidden losses on its books - losses that had been deferred while the stock was frozen - as evidenced by the 11.6 billion peso net loss Elektra reported once the true share value was acknowledged .

Engineered Stock Crash and "Sham" Privatization

Investor advocates allege that Salinas intentionally orchestrated this sequence - from freeze to crash to buyout - as part of a scheme to take Grupo Elektra private on the cheap. After the stock collapse, Salinas moved swiftly to initiate a privatization of Elektra. On Dec. 27, 2024, an extraordinary secret sham shareholder meeting was convened to approve the delisting of Grupo Elektra's shares from public markets, with the company claiming that 95% of shareholders had expressed interest in going private, a representation that's hard to believe. Why would investors of public stock want to go private run by a shady businessman with ties to drug cartels, money laundering, corrupt judges and politicians.

Given that Salinas and his affiliates control roughly 75% of Elektra's equity, this outcome was a foregone conclusion - a sham decision effectively made behind closed doors by the controlling insider, with minimal to no input from truly independent shareholders. The delisting process was rushed and opaque, announced during the holiday period, and presented as a strategic move to "reorganize" the company. Detractors have denounced it as a "sham privatization" intended to cement Salinas's control and bury Elektra's financial troubles away from public scrutiny.

Market observers note that the timing was highly advantageous for Salinas: by allowing Elektra's stock to nosedive to historic lows, **he could accumulate additional shares and buy out remaining investors at a severely devalued price, which is exactly what he did. In December 2024, Elektra's share price crashed to about MX$186 - down from highs of ~MX$1,600 a year prior - before modestly rebounding . "This is a textbook case of engineered decline followed by predatory acquisition," said one senior market analyst, noting that Salinas "capitalized on the collapse by acquiring a dominant share position at a bargain, effectively undermining investors who had bought in at much higher valuations". In the analyst's view, "This isn't just poor governance - it borders on financial sabotage." Such strong words reflect a growing consensus among minority investors that Salinas deliberately drove down Elektra's market value - whether by action or by cynical inaction - to profit from the situation. By taking the company private at the discount of its valuation, Salinas stands to consolidate 100% ownership for a fraction of Elektra's true worth, depriving remaining shareholders of fair value for their stakes. Salinas had filed a report with the Mexican stock exchange on April 3, 2025 that he bought back over 12 million shares.

The privatization deal's lack of transparency and absence of an independent valuation process have further fueled outrage. To many, the delisting vote was fraudulent, a mere formality carried out under Salinas's dominance, without proper safeguards for minority shareholders. "It's effectively a heist in broad daylight," commented a spokesperson for an investor rights group, adding that legitimate shareholders were trapped by the trading halt, then crushed by the price drop, and finally strong-armed into a take-private deal with almost no recourse. The entire episode has raised alarms about the weakness of corporate governance in Mexico when a powerful insider can seemingly manipulate market mechanisms to his sole advantage .

Regulators and Central Bank Urged to Act

The coalition is calling on Mexican regulators to intervene decisively to prevent this controversial delisting and to investigate Salinas's conduct for potential violations of law. Under Mexican securities law, the CNBV must approve any delisting of a public company, and typically only does so after ensuring minority investors have been protected (for example, via a fair tender offer or "sell-out" of their shares) . The group argues that allowing Elektra's delisting under the current circumstances would make a mockery of those investor protections. They urge the CNBV to withhold approval of Grupo Elektra's deregistration from the stock exchange and to scrutinize the lead-up to the privatization for evidence of market manipulation or fraud. "We implore the CNBV to stand firm and block this delisting," the statement reads, "at least until a full, transparent investigation determines whether Salinas breached securities laws or fiduciary duties in orchestrating this sequence of sham events." Legal experts note that if the allegations hold true, Salinas's actions could constitute market manipulation and serious breaches of fiduciary duty, exposing him and any accomplices to significant liability. Breach of trust against minority shareholders, if proven, would not only violate Mexico's Market Securities Law, but also undermine confidence in the fairness of the country's capital markets.

Regulatory concern is not limited to the stock market. Mexico's central bank (Banco de México) is also being urged to weigh in, given the implications for the broader financial system. Grupo Elektra's principal subsidiary is Banco Azteca, a major consumer bank.

Analysts at Moody's have warned that the manner of Elektra's privatization poses "reputational risks" for Banco Azteca, due to the extensive interlinkages and related-party exposure within Salinas's conglomerate, and highlights governance weaknesses in the group's family-controlled structure. The money laundering alarms at Banco Azteca are increasing as more news reports suggest that it is a catalyst for illicit drug trade, repatriating criminal cash back to Mexico from USA via Purpose Financial Inc and Remitly, the two money remittance firms.

The investor coalition further echoes concerns, arguing that allowing Elektra to be taken private amidst unresolved allegations of fraud endangers not only shareholders but also bank depositors and creditors. They call on the Bank of Mexico and banking regulators to ensure that Banco Azteca's stability is not compromised by the opaque and shady maneuvers of its parent company by a billionaire who has a criminal past. "The Central Bank should not stay silent," the statement insists. "It must publicly oppose this sham privatization and work with the CNBV to protect the integrity of the financial system."

"One-Man Benefit" at the Expense of Many

At its core, critics say, this entire saga benefited a single insider - Ricardo Salinas Pliego - while inflicting harm on thousands of other shareholders. Minority investors, including pension funds, retail investors, and employees with stock, have seen the value of their holdings collapse due to actions outside their control. By freezing the market and then orchestrating a low-ball buyout, Salinas "disenfranchised" these shareholders, effectively stripping them of both their money and their voice in the company. A former CNBV official, speaking on condition of anonymity, described the case as "one of the clearest examples of deliberate minority shareholder disenfranchisement in recent memory".

International watchdog group Transparency International also weighed in, stating that this case tests whether Mexican authorities are willing to confront powerful actors who engage in fraud against the public and uphold the rule of law: "This isn't merely a corporate scandal - it's a litmus test for the integrity of Mexico's markets. Failing to act would set a dangerous precedent, signaling that the wealthy and well-connected can rig financial markets with impunity".

The investors coalition is considering all legal avenues to challenge the Elektra delisting and seek redress. They emphasize that Ricardo Salinas should not be allowed to "get away" with a scheme that, in their view, amounts to securities fraud and market abuse. Some have called for coordination with international regulators as well, noting that U.S. authorities (such as the SEC) might have jurisdiction if any U.S. investors were misled or if cross-border transactions were involved . The press release concludes by reaffirming the group's resolve: "We will not stand by while one man's misconduct destroys billions in value and confidence. We call on the CNBV and the Bank of Mexico to halt this sham privatization before it's too late, and to hold Ricardo Salinas Pliego accountable under the law. The integrity of Mexico's financial markets and the rights of its investors depend on it."

https://markets.financialcontent.com/stocks/article/binary-2025-7-16-mexican-president-accuses-ricardo-salinas-of-corrupt-ties-to-judges-and-ministers-calls-for-judiciary-to-be-investigated?utm_source=chatgpt.com

https://www.openpr.com/news/4094826/ricardo-salinas-accused-of-orchestrating-fraudulent-delisting

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Founded in 1950 by Hugo Salinas Price, Grupo Elektra is a major Mexico-based conglomerate operating across retail and financial services.

This release was published on openPR.