Financial firm report Gotham City Investigation In one of his points of denunciation of Grifols’ financial situation, he assures: Catalan company did not publicly disclose $95 million loan to ScrantonHE Holding company Investments of the Grifols family. “This loan is not disclosed in Grifols’ records and appears only in Scranton’s records,” the executive summary stated. However, this statement is contradicted by documents published by KPMG, the auditor of Grifols’ accounts, which refer to the loan in the company’s 2018 Consolidated Annual Accounts Report.
The origins of this dispute relate to Grifols’s $538 million acquisition of Biotest of Scranton and Haema, two companies associated with obtaining plasma. To finance this acquisition, the investment company of the founders of Grifols and other managers of the house signed a loan of $ 95 million (82.96 million euros), where the borrower is Grifols Worldwide Operations Limited. Although Gotham denies Grifol’s presence in its accounts The auditor included this in the annual accounts of Grifols and its subsidiaries.. In addition, KPMG emphasized that this debt has a Euribor interest rate and a 2% spread and its maturity is December 28, 2025.
The report, published by Gotham City Research, accuses Grifols’ Board of Directors of manipulating the company’s revenue and profits by accounting for the profits of subsidiaries that Grifols no longer owns, but rather is the largest shareholder through one of its companies. Under Gotham’s criteria, these profits should not be recognized as Grifols’; This is a maneuver that also allows one to remain unaware of the excessive leverage the pharmaceutical company may allegedly have. Grifols defended itself by ensuring that the accounts approved by KPMG “reflected the accounting practices applied by the company to its operations” and denied that there was “new information that could be considered confidential”. The doubts planted in the market turned into this: Up to 25 percent decrease in prices The company located in Ibex-35.
Shareholders and analysts divided
The uproar caused by the British financial firm’s report has led to a slew of positions. The XTB broker notes: “Although we still have to wait for future events and the response of the pharmaceutical company, The alleged irregularities in the results are quite significant.“If approved, it could push its price to historically low levels.” European PressDamià Rey, professor of stock market analysis at the International University of Catalonia, emphasized the “high reputational risk” that the current situation carries for the company, and Emili Vizuete, professor of Business Administration at the University of Barcelona, pointed out that the decline in the stock market is “already a major disaster” and that the development of the stock market will depend on whether this information is confirmed or not.
Among the shareholders, Renta 4 assured that the report was “inaccurate, exaggerated and extremist” and also that he was “concerned” about Gotham’s downward trend. the day before publication it was around 0.57%. “The opinion of the author of the report is that they are wrong, although there are generally accepted accounting standards, or even if they are just viewpoints of the company. Doubts are raised about some of the transactions carried out. It raises doubts about the cleanliness and legality of the group’s operations, without presenting compelling arguments to support this, and even making completely false statements.” “Those who came to question him without being found,” they added.
Bestinver also came out in statements defending Grifols. Five days: “We already had the same doubts, led us to buy back the position we had in stocksbut we clean them and we reinvested the same. It is a case that has nothing to do with Gowex.” Gotham has revealed irregular cases in Spain, such as the case of technology company Gowex or Pescanova.