UPDATE 1-Pescanova debt more than double what it stated, says audit

Wed Jul 10, 2013 2:43pm EDT

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MADRID, July 10 (Reuters) - The debts of Spanish fishing firm Pescanova were more than double what it stated when it entered insolvency proceedings in April, the company said on Wednesday citing a KPMG audit, making it one of Spain's biggest ever bankruptcies.

Pescanova's debt was 3.3 billion euros ($4.2 billion) at the end of December, the company said. This compares with the 1.5 billion euro debt mentioned in the company's insolvency filing.

The former management of Pescanova acted to conceal the company's true debt position for many years, the audit said.

"During the last few years, accounting practices were designed and executed to present the group's financial debt as less than the true position," the company said in a statement, quoting from the audit.

Manuel Fernandez de Sousa, former chairman of Pescanova, was removed in April from the helm of the company he had run for more than three decades.

A court has charged him with falsifying information and insider trading. He has denied any wrongdoing.

The KPMG audit is a step in an insolvency process that could take months or years, ending either in liquidation or a plan to re-float the business.

The group's creditors include Spain's biggest banks as well as state bank restructuring fund the FROB, which nationalised the savings banks that lent Pescanova hundreds of millions of euros.

($1 = 0.7778 euros) (Reporting by Sonya Dowsett; Editing by Julien Toyer and Bernadette Baum)

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