MEXICO CITY (Reuters) -Shares in Mexican retailer Grupo Elektra deepened their losses on Wednesday, in a third day of volatile trades after the local stock exchange lifted a suspension implemented over a possible fraud by one of the company’s creditors.
Shares in the company – controlled by billionaire Ricardo Salinas – were down nearly 11% in afternoon trading, deepening the more than 70% nosedive recorded on Monday and erasing the 6.5% gains the share price clawed back on Tuesday.
Elektra has blasted the stock regulator’s lifting of the trading suspension, which began in July when Elektra said it was informed about a possible fraud scheme committed by one of its creditors, Astor Assets, which according to the group illegally disposed of over 7 million shares to sell them to the market.
Elektra is set to propose taking the company private at a shareholder meeting scheduled for Dec. 27, after 95% of its shareholders expressed interest.
Analysts at Moody’s Ratings said the privatization plan poses “reputational risks” for the group’s financial arm, Banco Azteca.
“The bank maintains significant direct and indirect interlinkages with Grupo Salinas’ economic conglomerate,” it said, pointing to “substantial related-party exposure, revealing weaknesses on its governance framework from the group’s closely held, family-based ownership structure.”
(Reporting by Kylie Madry and Raul Cortes; Writing by sarah Morland; Editing by Brendan O’Boyle)
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