Federal district court Judge Jed S. Rakoff called off a J.P. Morgan deal in an order that revealed the inside track on how the financial giant does business. The ruling of January 28 prevents Morgan from selling or participating the $225 million loan it made to Cablevisión, owned in the majority by Grupo Televisa, one of Mexico’s largest telecommunications companies. (Image)
Cablevisión used the loan to purchase a Empresas Bastel which operated a major fiber optic network throughout Mexico. While it was no secret that Morgan would sell the loan to other investors, Judge Rakoff found that Cablevisión, and its majority shareholder Televisa, had no intention of allowing it’s biggest competitor to control 90% of loan.
Cablevisión sued Morgan after it discovered that the firm had crafted a loan sales agreement that allowed the Morgan-selected investor, Banco Inbursa, S.A. (Inbursa), to gain virtually all of Cablevisión’s business secrets in return for purchasing the loan. Banco Inbursa is owned by Carlos Slim, the Mexican investor who also owns Telemex, Mexico’s largest telephone, fiber optic, and internet provider. The Slim companies are Cablevisión’s largest competitor for the very business the Morgan loan was used to purchase, a Mexican business and consumer fiber optic network.