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MEXICO CITY, Nov 18 (Reuters) - Mexico's first lady said on Tuesday she would give up a house at the center of a scandal that created a potential conflict of interest between President Enrique Pena Nieto and a company bidding for a lucrative rail contract.
The Mexican government this month abruptly cancelled a $3.75-billion high speed rail contract awarded to a consortium led by China Railway Construction Corp Ltd that featured a Mexican company known as Grupo Higa.
It then emerged that a subsidiary of Grupo Higa owned a luxury house that Pena Nieto's wife Angelica Rivera was in the process of acquiring, raising questions about the tender.
In a televised statement, Rivera, who was one of Mexico's most popular soap actresses before marrying Pena Nieto in 2010, said she had paid off about 14.3 million pesos ($1.05 million) of the value of the house and would sell her stake to settle any outstanding questions about the matter.
"Because I don't want this to continue being a pretext to offend and defame my family," Rivera said.
Rivera noted in her address that she had earned millions of dollars while working for Mexico's biggest broadcaster Televisa, and had the means to pay for the home. She had also acquired a separate luxury home while working for Televisa, she added.
"I have nothing to hide," Rivera said. "I've worked all my life and thanks to that I'm an independent woman."
The revelation about the house has aggravated discontent about the government's handling of the disappearance and apparent massacre of 43 trainee teachers by a drug gang working with corrupt police in southwest Mexico nearly two months ago.
Despite saying the gang had very probably incinerated the students, the government has yet to offer definitive proof, and sporadic protests and civil unrest have broken out.
On Tuesday, the president had asked his wife to explain how she acquired the house. But neither he nor Rivera have explained why one of the winning team from the rail consortium was also the owner of his wife's house.
Rivera also posted on her website a copy of a contract she had signed for the house in January 2012. The house was purchased for 54 million pesos ($3.98 million), paying a 9 percent rate of interest over eight years, it showed. ($1=13.5595 Mexican peso) (Reporting by Dave Graham and Luis Rojas; Editing by Simon Gardner and Clarence Fernandez)