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TV Azteca

From Academic Kids

TV Azteca is a Mexican television network. It was established in 1993, following the privatization, under President Carlos Salinas de Gortari, of the state-owned Instituto Mexicano de la Televisión ("Imevisión"). Its flagship program is the newscast "Hechos".

In Mexico the network operates two stations: XHDF ("Azteca 13") and XHIMT ("Azteca 7"). Both of these enjoy near national coverage.

The network also operates Azteca International, reaching 13 countries in Central and South America. On July 15, 2004, the Canadian Radio-Television and Telecommunications Commission denied a request for Azteca 13 Internacional to be broadcasted via digital paid TV as a third-language channel.

TV Azteca subsidiaries include Azteca America, the fastest-growing television network in the United States; Todito.com (http://www.todito.com), an Internet portal for North American Spanish speakers; and Unefon, a Mexican mobile telephony operator focused on the mass market.

On 5 January 2005 the US Securities and Exchange Commission accused TV Azteca executives (including chairman Ricardo Salinas Pliego) of having personally profited from a multi-million-dollar debt fraud committed by TV Azteca and another company in which they held stock. The charges are among the first brought under the provisions of the Sarbanes-Oxley Act of 2002, introduced in the wake of the corporate financial scandals of that year.

On April 28 2005 the Mexican Banking and Securities Commission (CNBV) notified TV Azteca, Ricardo B. Salinas, Chairman of the Board, and Pedro Padilla L., Board Member of the Company concerning financial penalties being imposed in connection with administrative procedures that were brought by the CNBV in late January 2005 arising from alleged violations of the Mexican Securities Law as a result of transactions that occurred in 2003 among Unefon, Nortel and Codisco. The aggregated amount of the financial penalties equals approximately US$2.3 million, of which the CNBV intends to impose upon TV Azteca a penalty equivalent to approximately US$50,000.

April 30, 2005 Finance Secretary Francisco Gil Díaz asked prosecutors to bring criminal charges against TV Azteca Chairman Ricardo Salinas Pliego on allegations he used privileged information to trade shares, people familiar with the matter said.

Gil Díaz's fiscal prosecutor filed the 1,200-page request to charge Salinas Pliego, who controls the No. 2 broadcaster, with the Attorney General's Office (PGR) April 27, said the people, who asked not to be identified. Regulators yesterday separately fined Azteca, its chairman and board member Pedro Padilla US2.3 million for securities law violations.

The proposed criminal charges go beyond a civil suit brought by the U.S. Securities and Exchange Commission Jan. 4 that accused Salinas Pliego and his company of securities fraud for hiding a transaction that netted him US109 million.

Just a few days before the charges were formalized, TV Azteca dennounced a blackmail attempt by Gil Díaz to avoid the transmission of an investigation by Azteca's reporter Lilly Téllez of alleged corruption acts during the 1994 economic crisis in Mexico. According to TV Azteca, the charges made by Gil Díaz were in retaliation for the transmission of Téllez report. The rest of the media found the accusations incredibly weak and, given the timing, suspicious: their proof was an unsigned document printed on plain paper stating the terms of the blackmail, supposedly given to an TV Azteca representative by Gil Díaz himself in his own office.

The case will test the country's insider-trading legislation for the first time since the government toughened the law in 2001 to criminally prosecute violators.

"There's recognition worldwide that until securities law violators are prosecuted criminally, civil enforcement will have a limited deterrence effect," said Jacob Frenkel, a former U.S. federal prosecutor and SEC enforcement lawyer who is now a partner at Shulman Rogers in Rockville, Maryland.

  • UNEFON

Salinas Pliego, 49, made a US109 million profit in 2003 after buying debt that TV Azteca phone unit Unefon SA owed to Nortel Networks Corp. for a discounted price, and then receiving repayment from Unefon at full value three months later, the SEC said in January. The SEC alleged Mexico City-based TV Azteca, whose shares trade in both Mexico and the U.S., failed to tell shareholders about the transaction.

The SEC requires companies to disclose so-called relatedparty transactions because they may involve conflicts of interest.

Dan McCosh, a spokesman for Salinas Pliego and the companies he controls, declined to comment on the possibility of criminal charges. Salinas Pliego and TV Azteca denied any wrongdoing Thursday and said they would appeal the administrative fines imposed by regulators, according to a statement sent to the Mexican stock exchange.

In September, Salinas Pliego told reporters he wasn't concerned about the SEC investigation. "We are totally convinced we acted correctly, and we are going to defend ourselves," he said.

  • DOWNGRADES

Mexican regulators started investigating Salinas Pliego and the companies he controls in December 2003, after TV Azteca's outside lawyers publicly expressed concern about the Unefon debt transaction.

Analysts from Merrill Lynch & Co. Inc., JPMorgan Chase & Co. and Deutsche Bank AG reduced their recommendations on TV Azteca stock on Jan. 8, 2004, after the company disclosed details of the Unefon transaction, sending the shares 11 percent lower that day to 5.52 pesos. TV Azteca fell 2.8 percent in trading today to 5.49 pesos, down 22.4 percent this year. Its American Depositary receipts fell 13 cents, or 1.6 percent, to US7.99.

Gil Díaz asked Congress last month to revise legislation to expand shareholder rights and facilitate company share listings to spur the stock market. The changes would add to amendments made in 2001 that defined the information controlling shareholders and companies must disclose to minority investors.

The bill that Gil Díaz is now proposing would replace Mexico's 30-year-old securities law and reduce by two-thirds, to 5 percent, the amount of stock shareholders must own to bring lawsuits against company executives, among other provisions. He said the new law won't be as strict as U.S. legislation.

See also

External links

[[1] (http://www.tvazteca.com/programas/barrapolitica/mitoshechos/denuncia.pdf)] TV Azteca's legal accusation against Francisco Gil Díaz. (PDF format, in Spanish)Template:Mexico-bcast-stub

es:TV Azteca

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