Gowex CEO Resigns in Disgrace - Company Files for Bankruptcy
Published on: 6th Jul 2014
Spanish municipal Wi Fi provider, Gowex has filed for bankruptcy and the CEO has resigned after admitting it falsified its accounts for the past four years.
The move came after an analyst report last week said that the company's numbers simply did not make sense and that the company could only be generating a tenth of the reported revenues.
At first Gowex hit back at the analyst report, but its shares plunged by 60 percent in two days until the stock exchange suspended them from trading. The firm had been due to make a statement on Monday, but on Sunday afternoon announced that the CEO had quit.
The company's founder, and CEO, Jenaro Garcia posted an apology on his Twitter account saying that he will collaborate with justice and face the consequences.
"To everybody. I am truly sorry" he added in a separate tweet.
The board of the Madrid-based company issued a statement saying that it had accepted Garcia's resignation after he took full responsibility for fake accounts, which date back for the past four years.
"The financial accounts of the company for the last four years, at least, do not show a full and fair view of the company's situation," Gowex said in its statement.
The Board, anticipating that the company might not be in a position to face its ongoing debts when they become due, has also agreed to file for a declaration of voluntary insolvency.
It marks an ignominious end for the fast growing and publicity hungry company that had spread out from its Spanish origins into a major international provider of municipal Wi-Fi services.
The firm is listed mainly on the Spanish stock market, but is also traded in New York, which could see agressive US prosecutors taking a very close look at how the accounts were falsified and if any other members of the board were negligent in not noticing the affair over the four years that it ran.