A Mexican federal court struck down a judicial appeal by Grupo Mexico, SAB de CV (GMexico) that sought to lift a freeze on shares comprising seven percent of the giant mining conglomerates outstanding equity. The subject of a lawsuit between London-based investment firm Infund LLP (Infund) and GMexicos controlling shareholder and CEO, Germán Larrea (Larrea), the shares in dispute represent well in excess of Larreas controlling stake in mining giant GMexico, a $24 billion global enterprise that does business throughout the U.S., Mexico and the rest of Latin America.
The lawsuit, brought by Infund against Larrea personally on May 3, 2013, claims that, in the face of an unprecedented liquidity crisis for GMexico, Infund paid approximately $75 million to its commission agent Larrea for the almost 65 million Series B, Coupon 5 shares on sale at the time, but that Larrea failed to deliver these securities. According to the lawsuit and GMexico public filings from 2006 and onwards, Larrea deposited the shares into his own accounts, where they now value over $2 billion and represent Larreas and his affiliates control of GMexico, which as of the date of this release is only 51 percent.
On June 25, 2013, a Mexico City district court formally granted an injunction to Infund freezing the $2 billion in shares, prohibiting, among other things the shares transfer and public registration. Notwithstanding GMexico not being a defendant in the action, GMexico, and not Larrea, has attempted to fight the injunction through a series of appeals and motions, including claiming that the 6th federal district in Mexico City has acted unlawfully. As of the date of this release, GMexicos arguments have been defeated in the 6th federal district and now more recently the 11th federal districts in Mexico.
Infund paid $75 million to German Larrea and received nothing in exchange. Mr. Larrea should be making his own case in court, not hiding behind Grupo Mexico, said Jose Antonio Marvan Lizardi, Infunds Mexico City representative. We are thrilled that the courts in Mexico are following judicial precedent in this matter. The case needs to progress without Larrea or GMexico resorting to legal chicanery or bloated, unfounded claims of judicial impropriety. We are confident that the Mexican courts will continue to act properly and with the utmost regard to judicial process.
Infund LLP is a securities trading and investment banking firm. Incorporated in 2003, the firm is registered in London, England.