Axo Group's scandal, company that will commercialize Nike in Argentina, fined for evasion in Mexico

The Mexican Justice accuses this company of having violated the Securities Market Law of that country. Axo already markets Nike in Argentina and in several countries of the Southern Cone.

Axo Group generated astonishment in the Argentine press several weeks ago because of the announcement that it will take charge of marketing the US brand in that country, and in its neighbors Chile and Uruguay. But the real news in Mexico, their country of origin, was the complaint by the Federal Commission of Economic Competition of Mexico (COFECE) for having violated the Mexican Securities Market Law. Axo Group strikingly omitted to inform the financial markets in a timely manner the income - as an investment partner - of the firm Alsea, operator of recognized food chains, such as Domino’s Pizza, Starbucks and Chili’s. For COFECE this is the same as not declaring the source of investment that the company uses to manage markets. And we are not talking about a small amount of money. Alsea, the largest restaurants operator in Latin America, entered Axo in 2013 with the purchase of 25% of the company's shares. COFECE said it had not been notified of that operation and therefore decided to fine both companies, Axo and Alsea, with millionaire amounts. This practice has different points of view, some of them very serious such as tax evasion or that the origin of the funds have been acquired from the black market. While there is no official justification, the hypotheses speak for themselves. The first fine was 25.7 million Mexican pesos for Alsea and 2.98 million for Axo. However, as time passes and in unclear circumstances, the amounts were reduced by 80%: the original Alsea´s fine was now for 4.67 million and 596 thousand Mexican pesos for Axo Group. These amounts could continue to be reduced, and without explanation in sight. This corporate relationship did not last long, which makes the story even more confusing, due to the destination of the shares: The percentage with which Alsea entered Axo (25%) was sold in 2017 to the private equity investment fund General Atlantic AH, which today owns 42.65% of Axo's shares, that is, it is the largest shareholder of the firm. However, in the 2018 annual report Axo omitted General Atlantic AH from the company's main shareholders chart. Under these conditions, Grupo Axo is responsible for marketing Nike in the southern cone of Latin America. And the sports Brand is not its only client, they had already worked in the United States and Mexico with Speedo, Victoria’s Secret, Tommy Hilfiger, H&M and Guess, among others.