Mexico’s Cabal: From Rags to Riches to Worldwide Manhunt : Profile: His story was nothing less than a fairy tale, many say. Authorities want to know where he got the pot of gold.

It was not merely a rags-to-riches fairy tale when Carlos Cabal Peniche suddenly emerged on the stage of international finance this year as “a corporate wizard,” a relative unknown who had built a $1-billion fortune from less than nothing in just six years.

Until this week, Cabal, at age 38, had become a symbol of the modern Mexican dream.

He was heir to nothing more than a bankrupt chain of department stores called Tu Casa (“Your House”) in the southern Mexican state of Tabasco. But he used his government’s radical economic reform policies, a network of loyal, influential friends and his own considerable wiles to buy banks, hotels, plantations and--almost--one of the world’s largest fruit and vegetable processors.

Most Mexicans saw in his life the ultimate, seemingly unattainable rise from their country’s virtually endemic poverty to a magic, instant prosperity.

On Wednesday, however, Cabal was a fugitive, the subject of an international manhunt.

Federal agents were pursuing him and several of his fellow directors on indictments accusing them of participating in one of Mexico’s biggest bank frauds. Authorities have said they ran an insider-lending scheme in which Cabal siphoned as much as $700 million from two major Mexican banks using ghost companies.

As the drama played out on television news shows, on newspapers’ front pages and in endless conversations--from the glass-and-steel towers in Mexico City’s financial district to the gritty street cafes of Tabasco, where Cabal began building his empire--his story, many here said, was nothing less than an old-fashioned fable.

“Everybody is talking about this, and what everyone is saying is, ‘I guess it doesn’t pay to get rich in a hurry,’ ” said Jonathan Heath, a prominent Mexico City financial analyst. “That, I think, is the moral of the whole thing.”

In announcing the criminal charges against Cabal and his corporate directors Monday, Finance Minister Pedro Aspe said the government was seizing Cabal’s Grupo Financiero Union and its subsidiaries to protect investors and depositors in the group’s two banks, Banco Union and Banca Cremi.

But the scandal’s effects are likely to be broader. Privately, many analysts here said the case could affect all of Mexico’s smaller, recently privatized banks, particularly if depositors shift their savings to larger institutions on the assumption that they are better-managed.

The greatest sting, though, will be felt in Tabasco, where officials estimated that more than half of all private investment is through Cabal’s companies. State officials described the Cabal case as “a powerful blow” that “will hurt the local economy.”

It was in Tabasco and its capital, Villahermosa, where young Cabal achieved legendary status during his heyday of corporate acquisitions.

“Six years ago, the daily gossip in the gambling room of the Cafe Casino in Villahermosa began with the question, ‘What did Carlos Cabal Peniche buy today?’ ” Miguel Angel Granados Chapa, a columnist at the respected Mexico City daily La Reforma, recalled Wednesday.

Cabal’s career of high-stakes wheeling and dealing coincided with the beginning of President Carlos Salinas de Gortari’s term. It was a time when Mexico’s president launched a new era of radical privatization, in which vast government resources were auctioned off--often with little subsequent government oversight--to entrepreneurs.

Cabal, by all accounts, began to win attention in 1988, when he first appeared as the new owner-administrator of a large Tabasco plantation, San Carlos del Golfo, which exported pineapples, melons and avocados to the United States, Canada, Germany, New Zealand and Southeast Asia.

As a plantation owner, Cabal befriended powerful former governors and members of other influential Mexican political families, forming partnerships with them in later, major corporate purchases, according to recent Mexican news reports and corporate documents.

But the information available on Cabal on Wednesday was unclear on just how he and his fellow investors got the capital to buy, within just a few years: the bank that later became Banco Union, for $200 million; Banca Cremi, for $560 million, and Florida-based Del Monte Fresh Produce, for $574 million.

Where, too, did Cabal and his backers get the capital for their bid last July for Del Monte Food Corp. of San Francisco, one of the world’s largest fruit and vegetable processors and exporters? They were to have put up $277 million in cash and assumed $700 million in Del Monte debt. The deal did not go through.