A defender by trade, the Grifols case has long leaned on audits conducted by a well-known consulting firm as a shield. Gotham City Research issued a report that questioned how Grifols used its holdings to hide debt and argued bluntly that the market value of the shares appeared to be near zero. Grifols responded to the CNMV with a formal rebuttal to the conclusions that once triggered the Gowex scandal more than ten years ago.
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All material transactions since 2018 have been detailed in the companys books and in public filings, including Form 20-F submitted to both the Spanish regulator and the United States SEC. There is no new information that could be seen as confidential. The company maintains that it does not share Gotham City Researchs interpretation unless its aim is simply to pursue a different angle. In the note to the CNMV, Grifols suggests that the fund may seek a short term share price impact for personal gain, as noted on page 2 of Gotham City Researchs report. The company also announced plans to issue another bond. The assessment by Gotham City Research regarding the acquisition of other companies focuses on the business aspects mentioned.
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The document presented by the fund casts a heavy charge against the Catalan group, accusing it of manipulating accounts and concealing part of its debt. Grifols has firmly rejected these claims in a formal note to the CNMV. The regulator indicated it had reviewed Gotham City Researchs report on Grifols and was evaluating the companys response. It stressed the importance of basing judgments on accurate data. The head of the CNMV stated that a suspension of listing was not being considered at this time. Economy Minister Carlos Body urged prudence and noted that decisions would follow regulatory guidance.
Leverage higher than declared
The fund argues that Grifols may have shifted investor leverage to as much as six times EBITDA, with the company valued at around 9.54 billion euros while carrying a debt load near 10 to 13 times EBITDA. Gotham City Research contends that both Grifols and Scranton Holding, the family entity owning 8.4 percent of Grifols, misled investors about their financial statements. It claims that if its estimate of Grifols debt holds, financing costs could rise beyond market assumptions and these shares should not be trusted as their true value is close to zero.
Gotham maintains that debt was hidden through the consolidation of two acquisitions, BLP Plasma and Haema, in Grifols consolidated statements. These two firms are cited as crucial because they account for roughly 40 percent of profits from non controlling shares. It also notes a $95 million loan extended to Scranton in 2018 tied to the BLP Plasma and Haema deals. The report adds that this loan is not reflected in Grifols documents and appears only in Scranton records.
Attribution: Observations drawn from the Gotham City Research report and Grifols public responses. Citations accompany the summarized points where appropriate to provide context for readers seeking primary sources.