Germán Larrea Mota Velasco (Larrea), CEO and controlling shareholder of Grupo Mexico SAB de CV (GMexico) and No. 67 on Forbes 2014 Worlds Billionaire List has failed to appear in court hearings against him in a personal lawsuit brought by UK investment firm INFUND LLP (Infund). A May 2013 judicial ruling freezing the disputed 8% of GMexico equities remains in effect, putting into question Larreas control of the $26 billion Mexican conglomerate.
Infunds suit alleges that Larrea, 60, breached a commercial commission contract when he refused to deliver GMexico securities for which he was paid USD $75 million by Infund. A key component of a 2003 $230 million capital raise by GMexico, Infund sought to secondarily purchase approximately 65 million Series B, Coupon 5 shares that only a select group, including Larrea and another entity controlled by Larrea, were eligible to initially purchase. GMexico public filings from 2006 onward confirm that Larrea retained the shares in his own accounts, and those disputed securities (as well as distributed dividends in cash and stock) are now worth more than USD $2 billion, representing 8% of GMexicos outstanding equity and are greater than Larreas 51% controlling stake in the firm.
The litigation is now at an advanced stage, with both sides substantially having made their case to the Mexican trial court. In presenting his defense, Larrea failed to appear personally in hearings and as such his defense to Infunds allegations now depends solely upon his earlier written statements. In those statements, Larrea claims he owns the disputed shares acknowledging that he paid no consideration for them.
By failing to appear, Germán Larrea has been deemed confessed as a matter of operation of law, said Infund spokesman José Antonio Marván Lizardi. Larreas defense acknowledges that he received USD $75 million from Infund and that he then used those funds to purchase the disputed securities. Yet his lawyers inexplicably continue to claim that their client Larrea owns the shares. Larreas defense essentially is that he got something for nothing, and that Infund got nothing for something. It defies belief.
Global conglomerate GMexico operates railroads and mines throughout the U.S. and Latin America through subsidiaries including Americas Mining Corporation (AMC), ASARCO LLC, and Southern Copper Corporation.