Grupo Salinas
Encyclopedia
Ricardo Salinas Pliego
Ricardo Benjamín Salinas Pliego is a Mexican businessman and one of Forbes World's Richest People since 2000. He serves as President and CEO of Grupo Salinas and Grupo Elektra, two holdings with interests vested in telecommunications, media and retail stores, among those TV Azteca, Elektra,...
, its current President took over the company, Grupo Salinas began to diversify.
Grupo Salinas now owns businesses that participate in the television industry, the telecommunications sector, the banking and financial market; amongst others. TV Azteca
TV Azteca
Azteca, is the second largest Mexican television entertainment. It was established in 1983 as the state-owned Instituto Mexicano de la Televisión , a holding of the national TV networks channel 13 and 7 and was privatized under its current name in 1993 and now is part of Grupo Salinas...
, Azteca América
Azteca América
Azteca América is a broadcast television network marketed toward Spanish-speaking families residing in the United States. As a rapidly-growing Spanish language network, Azteca América now reaches 89% of the Hispanic households in the U.S., operating in sixty-two markets nationwide. Wholly owned by...
, Grupo Elektra
Grupo Elektra
Grupo Elektra is a Mexican financial and retail corporation owned by Grupo Salinas. It is listed on the New York Stock Exchange , the Bolsa Mexicana de Valores and on the Spanish Stock Market Latibex ....
, Banco Azteca
Banco Azteca
Banco Azteca operates in Mexico, Panama, Guatemala, Honduras, Peru and Brazil and is already among the largest banks in Mexico in terms of coverage...
, Afore Azteca, Seguros Azteca
Seguros Azteca
Seguros Azteca is a Mexican life insurance company owned by Grupo Salinas since 2003. The Chief Executive Officer is Alfredo Honsberg.On October 2003, Grupo Elektra was authorized by the Secretaría de Hacienda y Crédito Público to acquire a private insurance company in Mexico that was re-branded...
, Iusacell
Iusacell
Grupo Iusacell is Mexico's #3 mobile operator.-Services:The company provides cellular services reaching about 90% of Mexico's population, including Mexico City and received more licenses to cover the remaining regions in early 2005. It has more than 3.5 million subscribers...
, Azteca Internet, GS Motors, Italika
Italika
Italika is the leading motorcycle brand and manufacturer in Mexico, with 200,000 motorcycles sold each year. In 2010 Italika made up 55% of the motorcycle market; in 2011 it had reached 63% market share, largely owning to their low initial cost. Italika sold their one-millionth motorcycle on March...
y la Asociación del Empresario Azteca.
Each of the Grupo Salinas companies operates independently, with its own management and board of directors.
History
It started with the store Salinas y Rocha founded by Benjamín Salinas Westrup in 1906 in MonterreyMonterrey
Monterrey , is the capital city of the northeastern state of Nuevo León in the country of Mexico. The city is anchor to the third-largest metropolitan area in Mexico and is ranked as the ninth-largest city in the nation. Monterrey serves as a commercial center in the north of the country and is the...
.
Elektra
A second company founded by Salinas was Elektra, a radio factory founded in the 1950. In 1952, under the leadership of Hugo Salinas PriceHugo Salinas Price
Hugo Salinas Price is the founder of Mexico's Elektra retail chain. The current head of Elektra is his son Ricardo Salinas Pliego. Elektra began as a workshop assembling electronic appliances for the Salinas Y Rochas chain a small regional retailer of appliances. Elektra then set up a direct sales...
, its CEO, Elektra began manufacturing television sets and increased its work force to 70 employees. Two years later, with the help of door-to-door salespeople, Elektra entered the direct-to-consumer market and began offering credit. In 1957, Elektra retail stores incorporated credit programs. By 1968, Elektra had 12 stores in the region and by 1987, 59 stores. Ricardo Salinas Pliego
Ricardo Salinas Pliego
Ricardo Benjamín Salinas Pliego is a Mexican businessman and one of Forbes World's Richest People since 2000. He serves as President and CEO of Grupo Salinas and Grupo Elektra, two holdings with interests vested in telecommunications, media and retail stores, among those TV Azteca, Elektra,...
then became the CEO of Elektra. Under Ricardo Salinas Pliego during the next twenty years the company has grown rapidly to the point where the chain has 1800 stores mostly in Mexico but also in key cities in Central and South America. Offering credit to the poor has been an integral part of growth.
Under the management of its new CEO, Elektra partnered with Western Union
Western Union
The Western Union Company is a financial services and communications company based in the United States. Its North American headquarters is in Englewood, Colorado. Up until 2006, Western Union was the best-known U.S...
to offer money transfer services from the United States to Mexico in 1993 and becomes a publicly traded company listed on the Bolsa Mexicana de Valores
Bolsa Mexicana de Valores
The Mexican Stock Exchange is Mexico's only stock exchange. It is situated on Paseo de la Reforma, a prestigious avenue in central Mexico City...
(BMV, the Mexican Stock Exchange).
The Grupo Elektra and Banco Azteca
Banco Azteca
Banco Azteca operates in Mexico, Panama, Guatemala, Honduras, Peru and Brazil and is already among the largest banks in Mexico in terms of coverage...
were criticized in a 2007 BusinessWeek
BusinessWeek
Bloomberg Businessweek, commonly and formerly known as BusinessWeek, is a weekly business magazine published by Bloomberg L.P. It is currently headquartered in New York City.- History :...
magazine article for abusing microcredit
Microcredit
Microcredit is the extension of very small loans to those in poverty designed to spur entrepreneurship. These individuals lack collateral, steady employment and a verifiable credit history and therefore cannot meet even the most minimal qualifications to gain access to traditional credit...
practices in Mexico due to lax bankruptcy
Bankruptcy
Bankruptcy is a legal status of an insolvent person or an organisation, that is, one that cannot repay the debts owed to creditors. In most jurisdictions bankruptcy is imposed by a court order, often initiated by the debtor....
, consumer protection
Consumer protection
Consumer protection laws designed to ensure fair trade competition and the free flow of truthful information in the marketplace. The laws are designed to prevent businesses that engage in fraud or specified unfair practices from gaining an advantage over competitors and may provide additional...
and interest rate
Interest rate
An interest rate is the rate at which interest is paid by a borrower for the use of money that they borrow from a lender. For example, a small company borrows capital from a bank to buy new assets for their business, and in return the lender receives interest at a predetermined interest rate for...
s laws of the country.
TV Azteca
The same year, Grupo Elektra bought Imevisión (the government television network) and renamed it TV AztecaTV Azteca
Azteca, is the second largest Mexican television entertainment. It was established in 1983 as the state-owned Instituto Mexicano de la Televisión , a holding of the national TV networks channel 13 and 7 and was privatized under its current name in 1993 and now is part of Grupo Salinas...
with 18 advertisers. By next year, the number of advertisers increased to 29 nationwide as the network debuted its news show Hechos
Hechos
Hechos , launched in February 1994 and conducted by Javier Alatorre, soon became a popular news show in Mexico. It was broadcast by the Azteca 13 network.Hechos was also produced in Chile by La Red TV when this channel was part of TV Azteca....
and was listed in the New York Stock Exchange
New York Stock Exchange
The New York Stock Exchange is a stock exchange located at 11 Wall Street in Lower Manhattan, New York City, USA. It is by far the world's largest stock exchange by market capitalization of its listed companies at 13.39 trillion as of Dec 2010...
(NYSE). In 1995, the number of advertisers reached 180 and Grupo Elektra acquired Hecali, a clothing retailer.
In 1996, TV Azteca launched Azteca Digital, the first digital media production center in Mexico and Azteca Music a record company. The station first telenovela
Telenovela
A telenovela is a limited-run serial dramatic programming popular in Latin American, Portuguese, and Spanish television programming. The word combines tele, short for televisión or televisão , and novela, a Spanish or Portuguese word for "novel"...
(Nada personal enjoyed strong ratings.
TV Azteca launched its own initial public offering
Initial public offering
An initial public offering or stock market launch, is the first sale of stock by a private company to the public. It can be used by either small or large companies to raise expansion capital and become publicly traded enterprises...
in 1997 in the BMV and the NYSE. The telenovela production increased to 4 titles, one of which reaches historic rating levels (Mirada de mujer
Mirada de mujer
Mirada de mujer is a Mexican telenovela, which was produced by and broadcast on TV Azteca in 1997, based in the Colombian telenovela of 1994 " Señora Isabel". It is considered one of the best Telenovelas in the history of the television industry in Mexico...
).
During the 1998 World Cup
1998 World Cup
1998 World Cup may refer to:*1998 IAAF World Cup*1998 Men's Hockey World Cup*1998 Women's Hockey World Cup*1998 FIFA World Cup*1998 Alpine Skiing World Cup...
, TV Azteca
TV Azteca
Azteca, is the second largest Mexican television entertainment. It was established in 1983 as the state-owned Instituto Mexicano de la Televisión , a holding of the national TV networks channel 13 and 7 and was privatized under its current name in 1993 and now is part of Grupo Salinas...
surpassed the level ratings of Televisa
Televisa
Televisa is a Mexican multimedia conglomerate, the largest mass media company in Latin America and in the Spanish-speaking world. It is a major international entertainment business, with much of its programming airing in the United States on Univision, with which it has an exclusive contract...
, the number one producer of Spanish-content in the world.
The SEC Affair
In June 2003, Ricardo Salinas and Moises SabaMoisés Saba
Moises Saba Masri was a Jewish Mexican businessman who studied engineering at the Universidad Anahuac in Mexico and came from a family of entrepreneurs present in various sectors....
took the credit that Nortel Networks, a Canadian company, had with Unefon
Unefón
Unefón is a Mexican mobile phone operator owned by Iusacell. The company was partially owned by Grupo Salinas and Mexican industrial Grupo Saba, reached more than 2.5 million subscribers in 2006 and its network is CDMA only, using no analog base stations. After a capacity exchange agreement with...
. They did so with their own resources with the sole purpose of rescuing the company. This investment of both businessmen prevented that Unefon filed for bankruptcy
Bankruptcy
Bankruptcy is a legal status of an insolvent person or an organisation, that is, one that cannot repay the debts owed to creditors. In most jurisdictions bankruptcy is imposed by a court order, often initiated by the debtor....
and topped off by the creditors.
On June 30, 2003 TV Azteca
TV Azteca
Azteca, is the second largest Mexican television entertainment. It was established in 1983 as the state-owned Instituto Mexicano de la Televisión , a holding of the national TV networks channel 13 and 7 and was privatized under its current name in 1993 and now is part of Grupo Salinas...
must submitted a report on the Mexican Stock Exchange (BMV) and the New York Stock Exchange (NYSE) for the fiscal year ended December 31, 2002 and about subsequent events to June 30, 2003. The preparation of the report was given by Scheinman and his team of lawyers, TV Azteca’s advisers in securities in United States since 1999. Once concluded the report to the NYSE, it was translated into Spanish and presented to the BMV.
On December 24, 2003 appeared in The New York Times, news about the assessment of the lawyers Scheinman and Akin Gump to not represent TV Azteca, because they alleged divergent views on the public disclosure of the purchase of Unefon’s debt. During the last week of December 2003 and early January 2004, the TV Azteca’s Board and its new legal team in the United States, Mayer Brown, decided to inform the public what Scheinman at the time advised that it was not necessary to state that Mr. Salinas and Saba owned the company that purchased the credit to Nortel.
In early 2004, the National Banking and Securities Commission of Mexico and the Securities and Exchange Commission of United States informed to TV Azteca the beginning of the inquiries about the information disclosure on the purchase of Nortel debt from Mr. Salinas and Saba. In February 2004, two stock exchange authorities began information requirements. Subsequently, the SEC began the interrogation to the Executives of TV Azteca.
In mid 2004 the SEC proposed a new bargain, now requesting $50 million, without undertaken court procedure. The offer was rejected. In January 2005 the SEC initiated a trial before in the Court of the District of Columbia, against TV Azteca, Ricardo Salinas, Pedro Padilla, Luis Echarte: the amount of the claim exceeded $140 million. The PGR also began a preliminary investigation against Ricardo Salinas and Pedro Padilla for alleged violations of the Securities Market Act.
Ricardo and Pedro Padilla reached a settlement with the SEC, which, without admitting any guilt, agreed to pay a total of $7.5 million, which would be distributed among the shareholders of TV Azteca who claimed to have been damaged. The class actions were completed in a similar way, by agreement to pay, without acknowledging any fault, $1.2 million. About the investigations conducted by the CNBC, some have already been declared invalid and that the dispute will probably continue to follow the same fate.
In addition, TV Azteca investors who had expectations of receiving shares of Unefon, received shares of Iusacell, a company with greater market penetration, which absorbed Unefon.
Unefon in December 2000 became a public company, giving $98 million by selling 176 million shares of Series A (7% of capital) in a successful primary bid in the Bolsa Mexicana de Valores. At that time, Mr. Moises Saba owned 46.5% of the company, TV Azteca 46.5% and the remaining 7% was traded from the public investing. Since September 2006, Grupo Salinas acquired 100% stake in Unefon.
Unefón
The same year, Grupo Elektra, invests in UnefónUnefón
Unefón is a Mexican mobile phone operator owned by Iusacell. The company was partially owned by Grupo Salinas and Mexican industrial Grupo Saba, reached more than 2.5 million subscribers in 2006 and its network is CDMA only, using no analog base stations. After a capacity exchange agreement with...
as it acquires wireless licence. Unefón and Elektra then form a strategic alliance to sell wirless telephone services in Elektra stores.
Grupo Salinas
In 2001, Grupo Salinas is created as Unefón becomes profitable. Two years later Grupo Salinas enters the financial services industry, offering AforesRetirement Funds Administrators
Retirement Funds Administrators are companies authorized to manage individual retirement accounts as authorized by the Secretaría de Hacienda y Crédito Público of Mexico and overseen by Comisión Nacional del Sistema de Ahorro para el Retiro ....
(retirement account programs) and insurance through Seguros Azteca
Seguros Azteca
Seguros Azteca is a Mexican life insurance company owned by Grupo Salinas since 2003. The Chief Executive Officer is Alfredo Honsberg.On October 2003, Grupo Elektra was authorized by the Secretaría de Hacienda y Crédito Público to acquire a private insurance company in Mexico that was re-branded...
. By the end of the year Azteca América
Azteca América
Azteca América is a broadcast television network marketed toward Spanish-speaking families residing in the United States. As a rapidly-growing Spanish language network, Azteca América now reaches 89% of the Hispanic households in the U.S., operating in sixty-two markets nationwide. Wholly owned by...
reaches 69% of the Hispanic
Hispanic
Hispanic is a term that originally denoted a relationship to Hispania, which is to say the Iberian Peninsula: Andorra, Gibraltar, Portugal and Spain. During the Modern Era, Hispanic sometimes takes on a more limited meaning, particularly in the United States, where the term means a person of ...
audience of the United States.
By 2004, TV Azteca and Elektra are traded on LATIBEX, the Spanish
Spain
Spain , officially the Kingdom of Spain languages]] under the European Charter for Regional or Minority Languages. In each of these, Spain's official name is as follows:;;;;;;), is a country and member state of the European Union located in southwestern Europe on the Iberian Peninsula...
stock market.
External links
- Official site.
- Charges against TV Azteca And Chairman—Ricardo Salinas by the Securities and Exchange Commission of the United StatesUnited StatesThe United States of America is a federal constitutional republic comprising fifty states and a federal district...
. - Hugo Salinas Price Economic Commentaries.