Mexico regulator says may sanction local unit of Spain's OHL

(Adds Mexico regulator statement, updates share price)

MADRID, Oct 26 (Reuters) - Mexico's stock market regulator (CNBV) is studying possible sanctions against a unit of Spanish construction group OHL after video recordings released earlier this year purportedly showed executives discussing overcharging on a government contract.

OHL Mexico was notified of the possible sanctions on Friday following an investigation that began in May, OHL said in a statement to the Spanish market regulator. It did not say what the sanctions might involve.

The CNBV confirmed on Monday that it given OHL Mexico and some of its directors 10 days to respond to possible violations of the country's securities law, without providing details. The regulator plans to make any eventual sanctions public.

According to OHL, CNBV said the company's Mexican unit did not follow proper accounting and securities rules for some of its concessions and did not report updated traffic levels for its highway concessions, which include a major toll road in the State of Mexico.

OHL said it did not agree with the allegations and already had responded to some of them. It said most of the cases under investigation by the CNBV had been looked at by its auditors and were not considered problematic.

It could not quantify the likely impact of the sanctions process on its reputation, business or results.

Shares in OHL Mexico closed up 0.22 percent at 23.28 pesos on Monday after initially falling when the market opened.

Recordings surfaced on YouTube in the spring that purported to show company executives discussing overcharging for the toll road and paying for a hotel stay by a state official.

OHL Mexico has said the recordings had been manipulated and were part of a smear campaign against it.

(Reporting by Paul Day, additional reporting by Christine Murray, Anna Yukhananov, Roberto Aguilar and Cyntia Barrera Diaz in Mexico City; Editing by Paul Simao and Grant McCool)