Notes to consolidated financial statements
For the years ended December 31, 2011 and 2010 (as adjusted)
(In thousands of Mexican pesos ($) and thousands of U.S. dollars (US$))
20. Contingencies
a. An official investigation of monopoly practices is currently being performed in the public railroad freight transportation market in Mexico, which was launched by the Federal Antitrust Board ("Cofeco") as a result of the sale of the common stock shares of Ferrosur, S.A. de C.V. and the acquisition of the common stock shares of Infraestructura y Transportes México, S.A. de C.V. As a result as this procedure the Cofeco determined that the performance of the monopoly practices established in article 9, section I of the Federal Economic Competition Law had been confirmed on the part of, among other companies, Grupo Carso, and ordered that such monopoly practice be eliminated and that a fine should be levied on, among other companies, Grupo Carso, for the amount of $82,200.
Grupo Carso brought an indirect amparo lawsuit (seeking court relief on constitutional grounds) against such ruling, which was filed with the Sixth District Court for Administrative Matters in the Federal District. The constitutional rights lawsuit was admitted by the court and in an ancillary judgment dated July 15, 2010, it definitively suspended the collection of the fine imposed on Grupo Carso, on the understanding that such measure would go into effect subject to the deposit of the total fine amount with the Federal Treasury to secure the actual and potential tax liability, pursuant to article 135 of the Amparo Law. Accordingly, the Company produced the respective deposit slip before the Federal Treasury, which was recorded as another asset in the accompanying consolidated balance sheet. The constitutional hearing was held on September 28, 2010 and in an initial verdict issued on December 16, 2010, the Sixth District Judge for Administrative Affairs of the Federal District declared that amparo lawsuit 887/2009-III would be set aside, given that the cause for dismissal was fulfilled on the basis that it was valid to file an action for annulment with the Federal Tax Court against the contested ruling issued by the Federal Antitrust Board. Among other companies, Grupo Carso filed a motion for reconsideration against such ruling, which has yet to be resolved at this date.
b. Certain subsidiaries are involved in court proceedings with the competent authorities for different reasons, mainly taxes and the recovery of long-term trade receivables owed to them. According to the Company's officers and attorneys, the great majority of these issues will be resolved favorably; if not, the result of the lawsuits will not significantly affect its financial position or results of operations.