The Mexican CNBV confirms the absence of any willful intent, fraud or damage to the financial system on the part of OHL México and its executives

The Mexican Banking and Securities Commission (CNBV, by its Spanish acronym) has ascertained the absence of any willful intent, fraud or effects on the Mexican financial system or third parties, in the activity conducted by OHL México, a subsidiary of OHL Concesiones, as concluded in the final resolution of the investigation that the company has undergone by the financial regulator since May 2015. Nevertheless, the CNBV has identified certain administrative infractions, ordering sanctions totaling 71.7 million pesos (3.6 million euros). 

The foregoing conclusion has been evidenced in the significant events respectively sent by the OHL Group and OHL México to the Spanish Securities Market Commission (CNMV, by its Spanish acronym) and to the Mexican Stock Exchange, upon completion of the sanctioning administrative proceedings brought against the company and its subsidiaries Organización de Proyectos de Infraestructura (OPI) and Concesionaria Mexiquense (ConMex), including some of their senior executives. 

Far from detecting any corrupt practice, the CNBV in its resolutions has highlighted that despite continued differences with the company in technical terms, it has not ascertained any willful intent, fraud or recidivism, both in the activities of the three issuer companies and their individual employees. Nor has any negative impact been detected on the Mexican financial system or third parties. 

The conclusions of the senior financial regulator in Mexico corroborate those already reached by Ernst&Young, PriceWaterhouseCoopers and KPMG which, along with Deloitte -OHL México’s auditors- are one of the world’s first-rank auditing firms. All reports coincide in reiterating the absence of corrupt practices by the company.

Technical and accounting differences

Following a policy of corporate disclosure and responsibility, without reservations, as was also the case in said audits, OHL México has cooperated with the CNBV during all administrative proceedings, during which various technical and accounting differences arose. 

Although the CNBV considers that OHL México’s accounting treatment of secured return was inadequate, pursuant to its own interpretation of IFRIC 12, given that the interpretation applied by the company and its external auditors -also ratified by other leading world auditing firms- does not coincide with that of the CNBV, as well as the fact that OHL México’s accounting treatment has not affected the Cash Flow Statement of the audited companies, the regulator has decided as follows:

• In any audited financial statements drawn up from now on, including those for the 2015 financial year, OHL México will continue to register secured return as a financial asset; however, it will include an informative note explaining what the accounts would reflect if secured return were registered as an intangible asset
• At the same time, OHL México will work together with its external auditors in order to propose to the CNBV how to register its secured return, given the nature and terms of the concession titles, seeking an interpretation that conforms to IFRIC 12 and is reasonable for the CNBV

On the other hand, after taking into account the mitigating circumstances indicated above, the CNBV has imposed administrative sanctions on the companies and their executives for a total of 71.7 million pesos (3.6 million euros); 24.6 million pesos (1.25 million euros) are payable by OHL México; 18.6 million pesos (0.94 million euros) by OPI; 18.3 million pesos (0.93 million euros) by ConMex, and 10.2 million pesos (0.52 million euros) will be paid by individuals who are currently executives of the foregoing companies. The company has decided not to appeal these sanctions. 

The three administrative resolutions leading to the sanctions are based on inconsistent information on traffic levels; a failure to provide the necessary documentation when registering some transactions; and incomplete documentation confirming that the formalities of the authorization process have been met in transactions with related parties. 

As regards the registration of secured return in the consolidated annual accounts of the OHL Group, based on all of the foregoing, to highlight the favorable auditing reports issued by Deloitte and specific reports issued by the world’s leading auditing firms coinciding with the Group’s interpretation, the OHL Group will apply the accounting treatment already notified to the CNMV in its response to the letter dated 4 September 2015; this information was published on 28 September 2015 on the website of the Spanish stock market regulator.

Now that the CNBV’s investigation has ended, OHL México would like to assure its shareholders that, beyond these technical differences, the resolution proves that it has at all times acted legally in the absence of any corrupt practice. Once again, the falsehood of all the accusations and slurs launched against it has been upheld; it has reiterated its wish to prosecute the persons responsible for this disrepute, blackmail and extortion before the courts of justice. 

OHL’s standard practice, with particular care and accuracy ever since it was listed on the Mexican Stock Exchange, will involve informing the market with the utmost disclosure, continuing to fully collaborate with the CNBV, whilst also renewing its wish to provide greater and better service to its infrastructure clients and users.