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MEXICAN TELECOMMUNICATIONS COS. SUE AT&T AND HARRIS CORP. FOR $490 MILLION, ALLEGING FRAUD; CASE COULD TARNISH NAFTA

 MEXICAN TELECOMMUNICATIONS COS. SUE AT&T AND HARRIS CORP. FOR
 $490 MILLION, ALLEGING FRAUD; CASE COULD TARNISH NAFTA
 NEW YORK, Oct. 27 /PRNewswire/ -- In a lawsuit filed today that describes elements of deception and intrigue more commonly found in the pages of an international spy novel, Grupo Sistemas Integrales de Telecomunicacion, S.A. de C.V. (Grupo SIT), a Mexican telephone equipment and telecommunications company, and several of its affiliated companies, sued American Telephone & Telegraph Co. and Harris Corporation, for over $490 million in damages, including $75 million in punitive damages.
 The suit, filed in the U.S. District Court for the Southern District of New York, charges that AT&T and Harris fraudulently induced Grupo SIT to purchase telecommunications equipment, which was known to be obsolete, defective and unsuitable, for use in a shared satellite communication system in Mexico and then -- in an effort to eliminate competition in the Mexican market -- purposefully refused to support the project or to interconnect the new Mexican network with AT&T's network known as "Skynet(R)".
 The suit further alleges that Harris used Grupo SIT's resulting financial difficulties to force the Mexican companies to place a Harris official in a high position in which he gained and used confidential information to establish a competing Harris subsidiary to sell digital switchboards in Mexico, thus destroying Grupo SIT's switchboard business.
 Joe Avina Landgrave, Grupo SIT's president and principal shareholder, said he believed Mexican businessmen and officials who are already wary of the North American Free Trade Agreement will closely follow this suit. They will want to see if Mexican firms which are unfairly treated by American companies can get proper redress, he said.
 "If my experience is a preview of the business tactics we can expect from giant North American companies trying to enter the Mexican market, then I respectfully suggest that our government should take a long and hard look at NAFTA," Mr. Avina said.
 Franz Leichter, of Walter, Conston, Alexander & Green, attorneys for the Mexican companies, said that Grupo SIT was one of the first private companies in Mexico allowed to compete with the state-owned telephone company known as Telmex. In 1989, the Mexican government granted to a Grupo SIT affiliate the first and, at the time, only permit to provide shared telecommunications services via satellite in Mexico. Thus, Grupo SIT was in a prime position to reap substantial profits by introducing state-of-the-art telecommunications to Mexico, a country which sorely needs such services to continue its development, Mr. Leichter noted.
 The total damages suffered by the Grupo SIT companies, which have gone into bankruptcy, are alleged to be over $415 million, including nearly $18 million actually invested in the "PACTnet" satellite system, $250 million in lost profits when the system failed, and $150 million resulting from the collapse and bankruptcy of Grupo SIT and its affiliated companies. Grupo SIT is also suing for $75 million in punitive damages, alleging that defendants' conduct was intentional and malicious.
 The suit alleges that after Grupo SIT had invested nearly $18 million in its telecommunications project, including the purchase of Harris' PACTnet equipment and technology, Harris "thereupon devised a plan and scheme to take advantage of the circumstances created by it and co-defendant AT&T to force Grupo SIT Companies out of existence" in the Mexican market and to attempt "to supplant the Grupo SIT Companies as a dominant force in Mexico in the telecommunications market."
 -0- 10/27/92
 /CONTACT: Jim Grossman of Howard J. Rubenstein Associates, Inc., 212-489-6900, for Walter, Conston, Alexander & Green, P.C./
 (T HRS) CO: Grupo Sistemas Integrales de Telecomunicacion, S.A. de C.V.; ST: New York, Florida IN: TLS SU:


KD-KW -- NY008 -- 5306 10/27/92 10:45 EST
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Date:Oct 27, 1992
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