Grupo Salinas is a Group formed by several companies focused on many different sectors. Grupo Salinas started as a retail store, but since Ricardo Salinas Pliego, 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, Azteca América, Grupo Elektra, Banco Azteca, Afore Azteca, Seguros Azteca, Iusacell, Azteca Internet, GS Motors, Italika y la Asociación del Empresario Azteca.
Each of the Grupo Salinas companies operates independently, with its own management and board of directors.
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It started with the store Salinas y Rocha founded by Benjamín Salinas Westrup in 1906 in Monterrey.
A second company founded by Salinas was Elektra, a radio factory founded in the 1950. In 1952, under the leadership of Hugo Salinas Price, 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 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 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 (BMV, the Mexican Stock Exchange).
The Grupo Elektra and Banco Azteca were criticized in a 2007 BusinessWeek magazine article for abusing microcredit practices in Mexico due to lax bankruptcy, consumer protection and interest rates laws of the country.[1]
The same year, Grupo Elektra bought Imevisión (the government television network) and renamed it TV Azteca with 18 advertisers. By next year, the number of advertisers increased to 29 nationwide as the network debuted its news show Hechos and was listed in the New York Stock Exchange (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 (Nada personal enjoyed strong ratings.
TV Azteca launched its own initial public offering in 1997 in the BMV and the NYSE.[2] The telenovela production increased to 4 titles, one of which reaches historic rating levels (Mirada de mujer).
During the 1998 World Cup, TV Azteca surpassed the level ratings of Televisa, the number one producer of Spanish-content in the world.
In June 2003, Ricardo Salinas and Moises Saba took the credit that Nortel Networks, a Canadian company, had with Unefon.[3] 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 and topped off by the creditors.
On June 30, 2003 TV Azteca 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,[4] 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.[5] 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.[6] 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.
The same year, Grupo Elektra, invests in Unefón as it acquires wireless licence. Unefón and Elektra then form a strategic alliance to sell wirless telephone services in Elektra stores.
In 2001, Grupo Salinas is created as Unefón becomes profitable. Two years later Grupo Salinas enters the financial services industry, offering Afores (retirement account programs) and insurance through Seguros Azteca. By the end of the year Azteca América reaches 69% of the Hispanic audience of the United States.
By 2004, TV Azteca and Elektra are traded on LATIBEX, the Spanish stock market.
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