Grifols, CNMV Findings, and Market Reactions: An In-Depth Look
Two months after the controversy began, the Spanish securities watchdog CNMV published the long-awaited review of Grifols’ financial statements. The report offers a relief for the Catalan multinational, whose share price has fallen about 40 percent this year. The CNMV confirms that the consolidated financial statements did not contain material errors and that there is no evidence to suggest Grifols’ reported debt levels do not reflect the true position. In fact, the commission states there is no need to restate the accounts. Yet it flags several important shortcomings in the consolidation process, especially in the level of detail in line items, the narratives around figures, the way EBITDA is presented, and the debt to EBITDA ratio. The CNMV explains that these gaps are significant because they have made it harder for investors to fully grasp the company’s financial position, results, and cash flows.
The most notable deficiency centers on the 2022 and 2023 income statements in connection with the review of the Inmunotek agreement. The CNMV believes the accounting treatment of the collaboration with InmunoTek was incorrect. Rather than recording it as an equity investment, it should have been treated as a joint operation. Correct application of accounting rules would imply a negative reserve adjustment of 39.3 million euros, and recognizing the impact in 2023 would have generated approximately 15 million euros in losses.
The CNMV also calls on Grifols to publish within 15 days a detailed breakdown of EBITDA and net financial debt, as of December 31, 2023 and 2022, for the most relevant entities with non-controlling interests. This would enable investors to calculate the leverage ratio with or without EBITDA and the corresponding debt levels.
The watchdog’s stance arrives two months after Gotham City Research, a US short seller, issued a critical report alleging that Grifols manipulated its accounts and concealed part of its debt. The report asserted that Grifols’ debt ranged from 10 to 13 times EBITDA, compared with the six times acknowledged by the company, and pointed to so-called tunnel transactions involving Grifols and Scranton Enterprises, described as a family-owned vehicle. The stock’s underperformance, which dipped by more than 50 percent at one point, highlighted the gap between market expectations and reported figures, with a total decline near 41 percent to date.
Grifols has rejected the allegations, and on January 26 it announced a lawsuit in the United States seeking damages for the harm alleged. In Spain, minority shareholders considered pursuing damages against the company’s managers amid concerns that relatives and executives with ties to the firm had harmed investors. A perceived lack of corporate governance and transparency was raised by several voices, including Thomas Glanzmann, the company’s president, during an investor briefing intended to dispel doubts about Gotham’s claims.
A few days later, on February 5, leadership changes were announced to address potential conflicts of interest. Grifols named Ignacio Abia as the new chief executive, while three founding-family members stepped down from executive roles but remained on the board as non-executive directors. Investors initially welcomed the move, but rating agencies remained skeptical. By mid-March, S&P and Fitch downgraded Grifols’ credit rating amid concerns about the company’s ability to service two 1.8 billion euro issuances due in 2025. Moody’s kept the rating under review, citing cash flow generation and delays in publishing audited accounts by KPMG.
In this context, the CNMV’s findings are viewed through the lens of ongoing market scrutiny and corporate governance debates. While the commission did not challenge the overall financial load, it underscored the need for clearer disclosures and more precise accounting treatments to help investors assess leverage, liquidity, and future cash flows with greater confidence. The situation reflects broader tensions that can arise when high-stakes financial reporting intersects with investor expectations, governance concerns, and regulatory oversight. The balance between timely disclosures and rigorous accuracy remains a central issue for Grifols as it navigates its forthcoming financial disclosures and audit cycles.
Source attribution and ongoing analysis come from institutional statements and market coverage tied to the CNMV review and related governance discussions. Observers note that the evolving narrative around Grifols’ debt, cash flow dynamics, and the outcomes of its audit processes will likely influence investor sentiment in the near term and shape how credit ratings agencies view the company’s capacity to meet its debt obligations and support future financing plans.