UPDATE 1-Arrest warrant issued for ex-Pemex CEO in Mexico anti-graft push

Mexico issued an arrest warrant for the former chief of Mexican state oil company Pemex, media reported on Tuesday, after his accounts were frozen in the first major graft probe since a new government took office promising to clean up politics. Mexico's government-owned news agency Notimex said a judge had ordered the arrest of Emilio Lozoya, who headed Pemex from 2012 to 2016.

The attorney general's office did not respond to requests for comment. Notimex also said Spanish police had arrested steel magnate Alonso Ancira in Mallorca, whose company, Altos Hornos de Mexico (AHMSA), had sold a fertilizer plant to Pemex.

On Monday, the Finance Ministry said it had blocked accounts belonging to Lozoya and to AHMSA for allegedly carrying out "illegal" operations. Lozoya, one of former President Enrique Pena Nieto's closest aides, is at the heart of the first high-profile corruption investigation launched by the government of President Andres Manuel Lopez Obrador, who won election by a landslide last year promising to root out public sector corruption.

Lozoya's lawyer, Javier Coello Trejo, did not immediately respond to messages seeking comment. Lozoya has previously denied any wrongdoing in the case. The allegations center on Pemex Fertilizers, a Pemex subsidiary created during Pena Nieto's term, which purchased two fertilizer plants in 2013 and 2016. One of the plants, ProAgro, was bought from AHMSA for $475 million, a sum that critics say was inflated. ProAgro was not operational when Pemex bought it.

Despite hundreds of millions of dollars spent to revive ProAgro, the plant was still not operating this year, according to a scathing government audit of the 2017 operations of Pemex, Mexico's biggest state-owned firm. The second plant, Fertinal, operated well below capacity, and Pemex Fertilizers suffered net losses of $665 million that year, according to the report. Meanwhile, its assets were worth $1.1 billion less over the course of the year, the report said.

Lozoya has defended the purchases as part of the government's efforts to provide support to agriculture in Mexico. Last week, the Public Administration Ministry announced that it had sanctioned two senior Pemex executives from the Pena Nieto administration, without identifying the executives.

One of the executives was Lozoya, according to the people with knowledge of the matter, who was barred from holding public office for 10 years. Another was the former head of Pemex's fertilizer unit, Mexican media reported.