Recent Case Decision – Statutory Auditors May Not Serve as Legal Representatives

The First Chamber of the Mexican Supreme Court of Justice of the Nation recently issued a case decision (citation 1s/J.143/2007) establishing thefollowing: “Legal attorney in fact. A power of attorney granted by a corporation to its own statutory auditor (Comisario) is not a valid legal grantof authority.” In the same case the Supreme Court held that any power of attorney granted to a statutory auditor to carry out legal acts on behalf ofthe corporation granting such power of attorney lacks legal force. The Court based its ruling on the necessity of statutory auditors being able toindependently carry out their oversight responsibilities, stating it was incompatible for the same person to serve as an independent statutory auditorand loyal legal representative or attorney-in-fact of the same corporation at the same time. Based on this decision, it is very important to review anypowers of attorney granted by Mexican corporations to its own statutory auditor and, as the case may be, make corresponding corrections to avoidpossible liability to corporations and their own statutory auditors.