Alberto Torrado Martínez has a knack for fast-food restaurants and other types of outlets. He and his brothers have turned Grupo Alsea, whose shares are traded on the Mexican Stock Exchange (Bolsa), into a veritable commercial powerhouse.
Grupo Alsea is the nations largest master franchiser of fast-food outlets, with a wide variety of brands including Dominos Pizza, Starbucks, California Pizza Kitchen, PF Changs China Bistro, Popeyes and quite a few other internationally known brands.
Last year, Alsea entered into negotiations to acquire the corporate-owned units, about 155 of them, of the restaurant chain Italiannis, whose chairman is Victor Cachua. As is perfectly normal in merger and acquisitions, Alsea requested an in-depth due diligence to determine the true market value of the assets involved in the proposed operation.
But, having recently acquired the master franchise for Mexico of California Pizza Kitchen, Alsea was found to have violated the confidentiality agreement with Italiannis, as inferred in the due diligence process. Italiannis sued, alleging that vital information on its operations had been used by Alsea in starting up the California Pizza Kitchen franchise, and Alsea countersued alleging breach of contract. From then on, all legal hell broke loose.
As shown recently in the hit movie-documentary Presumed Guilty, the wheels of justice in Mexico are efficiently greased by bribes, payoffs and kickbacks, and so it appears that Torrado found it convenient to offer a two-million-peso bribe to the judge overseeing the case, to get the thing resolved. Oddly, the judge involved is the same one, Héctor Palomares, who was depicted as a corrupt jurist in the controversial film.
The bribe issue is not imagined. Somehow, Italiannis managed to gain access to an e-mail sent to Torrado by Alseas lawyer, Guillermo Díaz de Rivera, saying that the two million payoff was a necessary expense to have the legal showdown resolved once and for all.
Last year, the same judge, who most definitely will have to be severely sanctioned by the Judicial Branch, issued a bench warrant for the arrest of Italiannis chairman Cachua and members of his family, for fraud and other nonexistent charges. An appeals court later threw out the warrant because it lacked any merit. Strangely, judge Palomares was never reprimanded, much less sanctioned.
In escalating the conflict, Italiannis lawyers last week decided to notify all Alsea franchisees of the above mentioned brands, under the terms of the Foreign Corrupt Practices Act (since most are U.S.-based brands), of Torrados shady practices that demonstrably include bribery.
The implication for Alsea franchisees is that authorities could find them guilty by association with their master franchiser of a variety of crimes, and they thus could be subject to U.S. penalties and sanctions.
One of the many ironies of this case is that Torrado at one point was chairman of the private-sector Communication Council, and that under his watch the council undertook a nationwide public service advertising campaign against corruption. Obviously, he doesnt practice what he preaches.