The Supreme Court has dealt a near-final blow to Ricardo Salinas Pliego, who faces paying a corporate tax credit of nearly 50 billion pesos — the amount left over from the seven appeals the businessman lost Thursday in the High Court, his last option. Although the initial debt amounted to just under 36 billion, the subsequent appeals to the litigation lost in the previous stages, which added surcharges for late payment, significantly increased the millionaire figure. The horizon that now appears is not encouraging for the tycoon, who will have enormous difficulty avoiding payment. The protection appeal reform passed by Congress just a month ago indicated a possible dedication for Mexico’s fifth richest man, to whom a few weeks later he had almost no choice.
After the technical push and pull that has sparked the debate on the modification of this figure – proposed to surround large debtors such as Salinas Pliego – the remaining wording in the various laws has a total impact on its process. On the one hand, the Legislator has established that the appeal for protection against administrative acts that require the payment of corporate tax credits is inadmissible and has eliminated the possibility of requesting the prescription of a definitive credit. On the other hand, it provided for a partial retroactivity clause which allowed the reform to be applied also to cases already open which entered a new phase of the process: a way of not giving up on the prompt recovery of the credits currently in dispute, which amount to two billion in total and are in different degrees.
In the executive phase that the employer is facing today, it is no longer possible to propose appeals for every moment of the procedure, as happened before, but rather a single final appeal that brings together all the intermediate challenges, a way to simplify and shorten the duration of the dispute. “A single protection can be promoted before the auction of the assets, that is, there has already been a collection request, the assets, the shares, the companies have been valued and before the auction the protection is proceeded with. But we are already talking about the fact that Mr. Salinas is already on the verge of losing everything”, explains Jaime Cárdenas, jurist and researcher at UNAM. The legislator also thought about this scenario by modifying the law, in which it established a maximum deadline of 90 calendar days for the court to make a decision starting from the hearing. At most, the process will last three months in each case.
“The situation of the Salinas Pliego companies is very compromised. What happened today in court was decisive. Everything indicates that, legally, the issue will be resolved within a maximum period of one year”, predicts the expert. “The remaining avenues were closed by the October reform,” agrees Patricia López, tax specialist at UNAM: “Before, you could ask for the credit to be extinguished due to prescription or oppose the enforcement, but both doors were closed.”
The tycoon must face two paths: accept defeat against the tax service (SAT) and pay the credit that the agency has stipulated, plus the surcharges; or expose yourself to the possible seizure of your assets. Salinas Pliego, for now, has announced that he will appeal to the Inter-American Court of Human Rights, since the national channels are exhausted for him, but this does not offer him a better horizon either. The tycoon should first present his case to the Inter-American Commission, which is the one that, if accepted, will take him to the Court. This tribunal is usually tasked with resolving issues related to “Latin American realities”, says the jurist, and lists: “Disappearances, torture, violations of indigenous peoples, protection of the environment…”. The tax issue is complicated, there is only a small gap if it is argued as a lack of due process, the lawyer explains, and the prosecutor adds: “The Court has been rather limited with respect to economic rights that concern moral persons and not human beings.”
Even if the resolution was favorable to the businessman, the outcome would not be in sight until almost a decade later, far from the fast-track execution process planned by SAT and without any real impact on him. “According to Mexican law, the execution will take place and no other court or supranational tribunal will be able to stop it,” agrees with Cárdenas José Antonio Quesada, a financial consultant and former official of the National Banking and Security Commission (CNBV).
If the payment goes ahead, the economist believes the impact on Salinas Group companies will be “immense.” “The calculation of destruction does not exactly equate to the amount of 50,000 million, but to all the consequences that there will be within this group in terms of the consequences of the valuation” of the conglomerate’s shares, explains the expert. “The issue is not just about today’s assets, but about the valuations they will have for the future. Companies for which there is no longer a medium and long-term perspective will fall,” he predicts.
The three State Powers have closed the siege of Salinas Pliego in recent months: the Government with the search for debts, the Congress with the approval of the amparo reform and the Judiciary with the acceleration in the resolution of legal cases that had dragged on for years and which concerned the fiscal years between 2008 and 2013, more than ten years ago. Options are now limited for a businessman whose wealth is valued, according to Bloomberg’s list, at $7.44 billion, about 136 billion pesos, at the current exchange rate.
The speed with which the tax service proceeds with collection will largely depend on the time needed to carry out the final calculation of the requested credits with surcharges included, for which there is no clear deadline. Then the ball will start to move. At the same time, another one forms north of the Rio Grande, in a New York courthouse. Its American creditors are demanding payment of a debt of 400 million dollars, which has already risen to 580 million due to delays. The trial continued this week and shows no sign of concluding quickly or favorably for the entrepreneur. The legal cases of the last decade crowd the doors of Salinas Pliego, which will have to resolve them with the arrival of the new year.
