Q&A: Ricardo Salinas Pliego, Salinas Group chairman

Said to be Mexico's third-richest tycoon, with a net worth estimated at $4.6 billion, Ricardo Salinas Pliego, chairman and founder of Salinas Group, has come under scrutiny from government regulatory agencies in recent years. In January 2005 the U.S. Securities and Exchange Commission (SEC) filed a lawsuit accusing the 51-year-old media mogul of fraud in the purchase and resale of discounted debt owed by one of Salinas Pliego's cell-phone companies; the deal yielded him a tidy $109 million profit. Later that year Mexico's National Banking and Securities Commission fined the entrepreneur, his TV Azteca network and Salinas Group CEO Pedro Padilla Longoria a total of $2.3 million in connection with that deal. Salinas Pliego reached a settlement with the SEC last year and agreed to pay $7.5 million in penalties and compensation. In a rare interview at his corporate headquarters in Mexico City, Salinas Pliego spoke publicly for the first time about the SEC settlement and his self-image as a businessman with NEWSWEEK's Joseph Contreras. Excerpts:

NEWSWEEK: Do you see yourself as a celebrity executive?
Ricardo Salinas Pliego: I don't think of myself as a kind of celebrity, but wherever I go people know me, they greet me. It really surprises me that people treat me very well, because if you saw everything that's written [about me] you'd think, "Well, they're going to pelt this guy with tomatoes."

Do you consider yourself a controversial figure?
People say I'm controversial. But I think I lead a very balanced and normal life. I'm devoted to my family and my businesses. Many of our businesses have broken up [existing] monopolies. The owners of those monopolies don't like that, and they invent things [about me].

In its lawsuit the SEC alleged that when your Unefón cell-phone unit sold debt to a company called Codisco at a deep discount, you concealed the fact that you and a partner owned Codisco, and the New York law firm that had been representing the TV Azteca network later severed its ties with you. Was the SEC lawsuit a witch hunt in your view, or do you acknowledge irregularities on your part in the debt transaction?
No, we behaved impeccably, and it was thanks to our investment in Unefón that we were able to save the company at a very difficult time when no one thought it could be rescued. If we hadn't bought that [Unefón] debt, the company would have been closed at a total loss. It has merged with [the] Iusacell [telecommunications firm] this year at a great profit for the shareholders of TV Azteca.

So why did you agree to pay the SEC penalties?
In the first place, they accused me of a $109 million fraud, and it was settled with a payment of $7 million. How strange, no? There evidently wasn't any fraud, because you can't settle a fraud of that size with a payment of that amount. That's impossible. What did happen was a failure to disclose information, and it's been acknowledged that [the omission] happened not because we had something to hide but because that's what [our] lawyers recommended. I had no problem with making the disclosure [about my interest in the Codisco company], but the American attorneys—to whom we paid a fortune—said it was fine [not to].

So this was the result of bad advice?
Exactly. I categorically deny that any fraud was committed.

You withdrew your companies from the New York Stock Exchange after the SEC sued you on the grounds of "excessive regulation." Can you ever foresee your company's shares being traded there at some point in the future?
No, no, that's dead. They hurt businesses with all that stupid, absurd, foreign regulation. We'll go to [bourses] in Luxembourg or London or any other place except the United States. And I'm not the only one: thousands of companies have delisted in recent years [from the New York Stock Exchange].

You're making a big push into Latin America at present, with plans to have banking and retail operations in seven countries outside Mexico in the coming months. Are you turning your back on the U.S. market?
I believe there's more need in Latin America than in the United States, and that's why we're doing this. Nonetheless, we have a strategy to enter the media industry in the U.S. via [our television subsidiary] Azteca América, and that's going very well. So there are opportunities in the U.S., and we are going to pursue them. We just think the opportunities are much greater to the south of us than to the north.

In recent years an M.B.A. from a top U.S. university has become an almost indispensable credential for an aspiring Mexican corporate executive, and you have an M.B.A. from Tulane University. How much importance do you attach to such a degree with your job applicants?
Zero, because [business schools] train them to think like bureaucrats. I, and the world at large, need people with initiative and creativity. I don't see [an M.B.A.] as a requirement. Quite the contrary: for me it's a minus.

Forbes magazine calls you the richest Mexican after telecommunications magnate Carlos Slim and the mining industrialist Alberto Bailleres.
How do you measure wealth? This is something truly absurd. To me wealth is the peace of mind you have, your family, your friends, your colleagues. Everything else is just money, and it really is funny how people pay so much attention to that.

Since you're also in the cell-phone business, what kind of a relationship do you have with Slim, who some say is the richest man in the world?
I get along well with Carlos. I think he's a brilliant, hardworking businessman. I think he also respects and appreciates me. I see him as a competitor, like a rival football or baseball team. He's a great rival, and it's a pleasure to play against his team, because it's a well-managed, professional team. I pitch to him and he tries to get a hit; he pitches to me and I try to get a hit. But business is business.