Grupo Elektra Shares Drop Amid Fraud Allegations

MEXICO CITY (Reuters) – Shares in Mexican retailer Grupo Elektra (BMV:ELEKTRA) experienced significant losses on Wednesday, marking the third day of volatile trading. This reaction follows the lifting of a suspension by the local stock exchange due to potential fraud involving one of the company's creditors.

In afternoon trading, the company's shares fell nearly 11%, adding to the 70% decline observed on Monday and overshadowing a 6.5% recovery on Tuesday.

Elektra, owned by billionaire Ricardo Salinas, criticized the stock regulator's decision to lift the trading suspension that had been in place since July. The suspension was related to allegations against Astor Assets, a creditor accused of illegally disposing of over 7 million shares.

The company is planning to propose a privatization move at a shareholder meeting on December 27, after receiving interest from 95% of its shareholders.

Moody's (NYSE:MCO) analysts cautioned that the privatization plan could lead to reputational risks for registered financial entity, Banco Azteca. The bank has notable financial ties to Grupo Salinas, raising concerns about governance due to its closely held, family-centric ownership.