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RPT-Spain's Gowex to file for bankruptcy, says accounts were false
July 6, 2014 / 10:40 AM / 3 years ago

RPT-Spain's Gowex to file for bankruptcy, says accounts were false

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MADRID, July 6 (Reuters) - Spanish wireless networks provider Gowex said on Sunday it would file for bankruptcy and its CEO and founder Jenaro Garcia Martin had resigned having acknowledged reporting false accounts for at least the last four years.

The move came just hours after the company said it had hired PricewaterhouseCoopers to carry out a forensic audit of its accounts in a response to a report from a firm called Gotham City Research that had questioned its revenue reporting.

Trading in Gowex shares was suspended on Thursday after they dropped by about 60 percent in two days, wiping around 870 million euros ($1.2 billion) off the company’s stock market value, in the wake of the Gotham report.

“Mr Garcia Martin, Chief Executive Officer and Chairman, has told several board members that the accounts of the company, for at least the last four years, were unfaithful and that he was responsible for this misrepresentation. The board ... has accepted his resignation,” Gowex said in a statement published on Spain’s MAB stock exchange.

Garcia Martin could not immediately be reached for comment. A brief posting on his Twitter account on Sunday read: “I apologise to all. I am heartily sorry.”

Gowex said in its statement that in anticipation it would likely not be able to meet debt repayments the board had agreed to file for bankruptcy and was looking at additional measures to protect the company’s interests.

It was not immediately clear whether Gowex would still present by Monday an action plan in relation to the Gotham report as announced this week. Spokespeople for Gowex did not immediately answer Reuters’ requests for comment.

$1 = 0.7331 Euros Reporting by Julien Toyer; Editing by Mark Potter

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