Shares in the blood products sector rallied early on Monday after Gotham City Research, a prominent bearish fund, published a report alleging accounting irregularities at the company. Despite the initial surge of as much as 2000.7 percent, the gains cooled as the session progressed, with Grifols finishing the day about 0.25 percent higher. The modest end came as the company reaffirmed the planned sale of its Chinese subsidiary, an announcement that helped stabilize sentiment. Late Sunday, Grifols informed the National Securities Market Commission that Gotham City Research’s assertions would not derail the agreement to sell 20 percent of its Shanghai Raas unit. The deal, valued near 1.6 billion euros, is expected to close in the first half of 2024, according to Lixia Tan, vice president of Haier Group Corporation, who commented on the transaction. The broader Ibex index opened the week slightly lower, down around 0.18 percent to 10,076.9 points, having hovered near the 10,100 mark on Friday.
Seven connections between Grifols and family-owned Scranton
In the following days, headlines emerged detailing how Grifols faced heightened scrutiny. The stock slumped, losing as much as 38 percent of its value in a short span, translating to several billion euros in market value. The decline began after Gotham City Research released its report, triggering a wave of selling that pushed shares lower by more than a quarter and at times into double-digit reductions. Yet the share price recovered a portion of those losses on the next day and again fluctuated as investors weighed the fund’s claims against the company’s explanations. Market chatter had been amplified by a Reuters report that briefly claimed Santander had acted to substantially alter Grifols’ price target, a point later corrected by the bank itself. This sequence underscored how fast-moving headlines can influence perception even when outcomes remain uncertain.
Gotham City Research has linked Grifols to Scranton Enterprises, an investment vehicle associated with the company’s founding family. The report suggested that a related debt position was understated by as much as 920 million euros, driven largely by financial transactions between Grifols and Scranton, which reportedly holds 8.4 percent of Grifols. During a recent investor meeting, Grifols’ chairman and chief executive, Thomas Glanzmann, noted that regulators and the auditor have reviewed the matters at hand, and CNMV has requested information to identify the investors connected to Scranton, including several members of the founding family. The exchange of details with regulators continues as both parties aim to illuminate any perceived misalignment between corporate structure and real ownership.
“Area for improvement”
During the conference call, Glanzmann acknowledged opportunities to strengthen governance and communications. He rejected Gotham’s report, saying it aimed at short-term price gains and was driven by personal interests. He argued that the document relied on information that has already undergone regulatory review and audit scrutiny. The company emphasized that its governance framework is being reinforced, with ongoing efforts to improve transparency and stakeholder engagement rather than to retreat from accountability.
When asked about the government’s stance on the issues raised, the economy minister indicated that authorities are maintaining constant contact with the regulator responsible for market oversight. The minister stressed that listed companies must conduct their actions within the bounds of the law to ensure the smooth operation of the securities market. The government confirmed it is in touch with CNMV and expressed hope that the regulator will assess the presented information and take any actions deemed appropriate. The exchange with the regulator signals the seriousness with which the authorities view market integrity and investor protection, especially in cases involving cross-border exposure and complex corporate structures.