Mexican mobile phone operator sues IBM for $2.5 billion

Wed Apr 16, 2014 2:59pm EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Nate Raymond

NEW YORK (Reuters) - Mexican mobile phone operator Iusacell SA de CV sued IBM Corp on Wednesday, accusing the U.S. technology giant of making fraudulent representations that caused it to lose $2.5 billion in profits.

The lawsuit, filed in federal district court in New York, centered on a contract that Iusacell said IBM induced it to enter into in Mexico.

"Events subsequent to the execution of the agreement have revealed that IBM both knowingly misrepresented and wrongfully concealed from Iusacell material facts both before and during the parties' relationship," Iusacell said in the complaint.

IBM said in a statement that the lawsuit was a "transparent attempt" by Iusacell, which is co-owned by media and retail mogul Ricardo Salinas' Grupo Salinas and broadcast giant Grupo Televisa, to avoid its contractual obligations.

IBM said it signed a long-term contract with Iusacell in 2010 under which IBM's Mexican unit made significant investments in Iusacell's business.

"Despite major improvement to Iusacell's information technology infrastructure and growth in Iusacell's revenues, Iusacell has failed to pay IBM Mexico what it is owed under the contract," IBM said in the statement.

IBM's Mexican unit already has filed an arbitration claim against Iusacell in an effort to enforce the contract, according to IBM, which called Wednesday's lawsuit an "ill-advised attempt to end-run" that case.

A spokesman for Grupo Salinas had no immediate comment on the case and a lawyer for Iusacell did not respond to a request for comment.   Continued...

A man speaks on his mobile phone in Mexico City September 26, 2012. REUTERS/Edgard Garrido