MEXICO CITY (Reuters) - Mexican federal auditors are investigating an investment made by the country’s state workers’ pension fund, after Reuters reported it spent millions of dollars on shares in a company spiraling toward bankruptcy.
PensionIssste plowed more than $20 million into construction company ICA (ICA.MX) and became the largest shareholder just before ICA suspended debt payments, Reuters reported this month. The fund is set to lose most of its investment in a restructuring.
The story sparked outrage in a country where corruption has become a major theme in the July 1 presidential election. It has provoked calls for further investigations by the head of the lower house social security committee.
Issste, the federal government workers’ social security body that oversees PensionIssste, confirmed in a statement on Wednesday that its internal control unit had started an audit that would hold people responsible for any anomaly, including possible criminal action. The internal control unit is housed within Issste, but its investigators are employees of the Public Administration Ministry, a federal anti-graft watchdog.
Issste also confirmed that PensionIssste, which manages around 195 billion pesos ($10.58 billion) of mostly government workers’ retirement money, bought the shares in ICA in August 2015 based on publicly available information that did not suggest the company was going bankrupt.
Reuters reported that PensionIssste has asked banking and securities regulator CNBV to look at whether ICA broke Mexican securities law, in failing to disclose important information to the market. ICA has not responded to requests for comment.
Pensions regulator Consar examined the purchases and said that they complied with existing rules.
($1 = 18.4250 Mexican pesos)
Reporting by Christine Murray; Editing by David Gregorio