In another unusual twist, lawyers for Salinas are fighting in court to prevent the stock from trading. On Friday morning, Elektra said that resuming trading would cause “irreparable damage to the company” adding that the exchange and regulators would be responsible for any “adverse effects.” It is, analysts said, a not-so-veiled play to keep the stock price from collapsing.
Salinas is the third-richest person in Mexico. Credit: Bloomberg
“It’s a golden cage — looks real pretty but it’s still a cage,” said Carlos Legaspy, chief executive officer of broker-dealer Insight Securities.
A spokesperson for the billionaire didn’t respond to requests for comment on Elektra or his wealth.
Salinas has won legal rulings against the Mexican exchange before. Back in 2012, his lawyers filed lawsuits against exchange officials and successfully beat back an attempt to kick it off the same index. Officials had alleged the company was manipulating the amount of floating shares to help maintain its inclusion in the benchmark.
Uncle Rich
Salinas controls nearly 80 per cent of Elektra’s outstanding shares, according to data compiled by Bloomberg, and has relied on that holding to borrow money and support the extravagant lifestyle he depicts with his online “Tio Richie,” or Uncle Rich, persona.
His stake in the company, which offers everything from appliances to telephones and motorcycles, and also includes branches of Banco Azteca, represents three-quarters of his net worth, the data show.
“If you use your budding empire as a personal piggybank, things may eventually turn iffy,” said Diego Ferro, founder of M2M Capital, a New York-based investment firm focusing on emerging markets.
Meanwhile, Salinas is facing another potential blow to his wealth. Since last year, the billionaire has been locked in an increasingly heated confrontation with the government over billions of dollars in tax claims.
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The government alleges that four of his companies owe some 63 billion pesos ($4.7 billion) in taxes in 17 different cases going back as far as 2008. Salinas has argued that the government is trying to “charge us twice” by not recognising deductions from losses.
After years of court battles, several claims against Elektra are in their final appeals before the Supreme Court, which could rule in the coming months.
Even with the share freeze, Salinas’ net worth has fallen 28 per cent this year from $US15.6 billion, according to the Bloomberg Billionaires Index.
As painful as the financial hit may ultimately be, Legaspy, the CEO at Insight Securities, said there’s one thing he’s certain of when it comes to someone as resilient and deep-pocketed as Salinas: “He’ll survive.”