- The People’s Republic of China indirectly holds 23.6% of the equity in Altan. Yet the Mexican Constitution and several laws explicitly prohibit ownership of Red Compartida by foreign governments.
- The China Mexico Fund L.P. (CMF) was partially funded by banks controlled by the Chinese government, specifically, the China Investment Corporation and the China Development Bank Capital.
- CMF Investment Company II B.V., an investment vehicle managed by CMF, holds an equity participation of 23.6% in Altan Redes S.A.P.I. de C.V.
- The IFT cannot legally award a concession in favor of Altan Redes S.A.P.I. de C.V.
One of the most striking irregularities in the Red Compartida process is the IFT’s approval of the China Mexico Fund L.P.’s participation as a member of the Altan Consortium. The IFT’s antitrust opinion contains no analysis of the origins of the funds.
The China Investment Corporation was created in 2007 and is entirely owned by the Chinese government. Its purpose is to manage and diversify investments in private equity and financial derivatives. More information can be readily accessed at www.china-inv.cn
The China Development Bank (CDB) was created in 1994 as a political and financial institution under the direct control of the People’s Republic of China State Board. In 2015, the Board defined it as a development financial institution. In 2009, the China Development Bank Capital was established as a subsidiary of the CDB.
Hence, based on publicly available information, the government of the People’s Republic of China is a participant in 23.6% of the equity of Altan Redes.
Granting a wholesale concession to Altan Redes and allowing it to commercialize the 90 MHz in the 700Mhz band assigned to Red Compartida is contrary to the Constitution and the law.
- Article 111 of the Federal Telecommunications Law (LFTR) explicitly prohibits the award of certain telecommunications rights to a foreign government or state.
- Article 28 of the Constitution and Article 2 of the LFTR explicitly mandate that, in matters of telecommunications, the state has the obligation to protect Mexican sovereignty and national security.
- Article 17 of the General Law of National Goods (Ley General de Bienes Nacionales) clearly establishes that any concession can be denied if the award would threaten the national security or when the public interest is affected. The direct or indirect participation of a foreign government must be considered.
- The General Law of Communications (Ley de Vias Generales de Comunicacion) also contains the mandate established in Article 111 of the LFTR, confirming the prohibition against awarding certain rights to any foreign government and establishing that any such award would be illegal and void.
This prohibition was put in place to prevent any concessions granted by the Mexican government from coming under legal or material, direct or indirect, control by a foreign government or state. Hence it is unlawful to yield, encumber, pledge or assign in a trust, mortgage or totally or partially alienate the rights derived from any concession. No foreign government shall be granted, directly or indirectly, any right derived from a telecommunications concession, such as the 700MHz band.
Thus it is unlawful and inadmissible for the Instituto Federal de Telecomunicaciones (IFT) to grant the wholesale concession to Altan Redes. The IFT would be in violation of the Constitution and the LFTR if it grants the concession.
The Rivada Consortium has delivered the above information directly and officially to the IFT, asking for the matter to be investigated and for the participation of the People’s Republic of China to be fully clarified. It is the IFT’s turn to follow the Constitution and the law, which aims to prevent foreign governments from having control or influence over strategic assets of the Mexican peo