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KCSI Announces Mexican Courts Agree to Hear Legal Actions Challenging Unilateral Decisions by TMM.

Business Editors

KANSAS CITY, Mo.--(BUSINESS WIRE)--Jan. 15, 2002

Kansas City Southern Industries (KCS) (NYSE: KSU) announced today that Mexican courts have agreed to hear the legal actions initiated by NAFTA Rail, a Mexican subsidiary of KCS, challenging certain resolutions adopted by Grupo Transportacion Ferroviaria Mexicana, S.A. de C.V. (Grupo TFM) at the end of last year.

NAFTA Rail has challenged certain resolutions, among others, involving approval of (i) a dividend to the shareholders of Grupo TFM, and (ii) TFM, S.A. de C.V.'s lease of the northern half of the international railroad bridge at Laredo, Texas, from Mexrail, Inc. The resolutions were adopted at Grupo TFM with only the affirmative vote of Grupo TMM, S.A. de C.V. (TMM), one of the shareholders of Grupo TFM. NAFTA Rail pursued legal actions because it believes that the resolutions were adopted in contravention of NAFTA Rail's minority shareholder rights at Grupo TFM. TMM is the majority shareholder of both Grupo TFM and Mexrail, Inc.

On December 21, 2001, KCS filed for injunctive relief in this matter in the Chancellery Court of Delaware. Mexrail, Inc. is a Delaware corporation. While the Delaware court did not grant injunctive relief, questioning its jurisdiction over the dividend issue, it also did not rule on the merits of the lease of the bridge, which may still be considered. Likewise, NAFTA Rail asked the Mexican courts to consider an immediate suspension of the resolutions. The Mexican court, considering the request for immediate suspension of the payment of the dividend, did not believe it had sufficient information to grant the immediate suspension requested at this time, but did accept the suit for litigation on the merits of the case.

"This matter is between KCS and TMM. We fully support Grupo TFM and its management, and Grupo TFM continues to develop as the premiere rail carrier in Mexico," said William Galligan, a KCS spokesman. Galligan added that, "KCS will continue to take all actions necessary to protect its investment and its rights in Mexico."

KCSI is listed on the New York Stock Exchange as KSU and it owns The Kansas City Southern Railway Company and other transportation-related holdings.

This press release includes statements concerning potential future events involving the Company, which could materially differ from the events that actually occur. The differences could be caused by a number of factors including those identified in KCSI's December 31, 2000, Form 10-K and the current report on Form 8-K dated December 11, 2001, each filed by the Company with the Securities and Exchange Commission (SEC). The Company will not update any forward-looking statements in this press release to reflect future events or developments.
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Publication:Business Wire
Date:Jan 15, 2002
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