Gabriela Rico / Arizona Daily Star

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BROWNSVILLE, Texas — The head of the Mexican conglomerate that once controlled Tucson copper company Asarco LLC sold its shares in lucrative Peruvian mines and eventually allowed the company to go bankrupt to protect it, not destroy it, he says.

Germán Larrea, CEO of Grupo Mexico, under subpoena by a federal judge, was on the witness stand for more than five hours Tuesday and defended the Mexico City-based company's handling of Asarco's affairs.

Asarco is suing a U.S. subsidiary of the former parent company claiming fraudulent transfer of its interest in the mines and is seeking $11.3 billion in damages and the return of its majority interest in the copper mines.

Larrea, 54, said he relied on advice from attorneys and financial experts in making decisions about Asarco.

U.S. District Judge Andrew S. Hanen, who kicked off the questioning, asked Larrea about the history of Grupo Mexico and its decision to buy Asarco in 1999 and then transfer its mines shares.

Hanen wondered how, despite selling its best asset, Asarco was "left with nothing to show."

Larrea said the Southern Arizona copper company was in a "good position" because much of its debt was reduced as a result of the transfer.

When Hanen asked what Grupo's reaction was to the fact that Asarco's finances were so grim that its mining trucks were out of gasoline, Larrea said he considered Asarco a free-standing company that needed to make it on its own.

The judge asked Larrea if Grupo Mexico ever tried to solicit higher bids for the Southern Peru Copper shares.

Larrea replied that the company did not.

When questioned by lawyers for Grupo's Americas Mining Corp., Larrea said he listened to advisers, despite his personal wishes that Asarco not file for bankruptcy.

Litigation since the 2005 bankruptcy has been "very, very expensive" and Larrea said the millions of dollars spent on lawsuits would have been better spent on paying creditors.

During cross-examination by Asarco lawyers, Larrea repeatedly denied that his motives for purchasing Asarco were to get his hands on its share of the Peruvian operation.

Larrea said that was simply the opinion of some officials within Asarco and Grupo Mexico, but not a proven fact.

On numerous occasions, the judge instructed Larrea to answer the plaintiff's questions and save the lengthy explanations for after he had provided an answer.

The much-anticipated appearance of Larrea, who avoids public appearances, was void of any contentious moments, as the judge had warned lawyers to keep a civil tone.

Larrea and his family are listed as third among Mexico's wealthiest people on Forbes magazine's list of billionaires this year, with an estimated net worth of $7.3 billion.

When Larrea arrived, wearing a dark suit and red tie, he took his seat at the witness stand before the proceeding started and surveyed the packed courtroom. He declined interview requests.

Several armed U.S. marshals were present throughout his testimony, and Larrea was whisked in and out of the courthouse through a back door.

Out front, about 20 miners and union representatives awaited his arrival, saying they were hopeful the judge will strip Larrea of all his U.S. and Peruvian properties and set an "example of justice for Mexico," said Javier Zuñiga Garcia of Mexico City.

The miners in Cananea have been striking against Grupo Mexico since last summer, demanding safety equipment and better pay.

The union members said they don't want a repeat of the February 2006 accident that left 63 miners buried after an accident at Grupo Mexico's mine in Coahuila.

Zuñiga said the Mexican government has not assisted the families of the dead miners, who demand that Grupo Mexico pay to exhume the bodies and upgrade equipment at the other mines.

In January, Grupo Mexico won its bid to have the strike at the Cananea copper mine declared illegal after losing $600 million in sales.

Police ejected strikers from the gates at the mine, about 100 miles southeast of Tucson, and put the mine back in Grupo Mexico's control.

A Mexican federal labor board declared the strike illegal because the 1,287 workers didn't follow proper procedure when they walked out July 30.

On Tuesday, the miners who traveled all night to attend the hearing in the South Texas courtroom said they hope Larrea is held accountable by the U.S. justice system and that the Mexican government will stop bowing to one of the country's richest men, Zuñiga said.

"How is it possible that our neighbors to the north can apply justice and the Mexican government refuses?" he said.

The trial, which began May 12, is set to wrap up Thursday with closing arguments.