The National Securities Market Commission (CNMV) has noticed “deficiencies” in Grifols’ accounting and has asked the multinational to expand the information it provides to investors about its performance and its net financial debts. However, he does not consider it necessary for the firm to reformulate its accounts.
The Spanish stock market regulator chaired by Rodrigo Buenaventura has finally issued the report it announced in January, following the attacks launched by the bearish fund Gotham City Research, which accused the Catalan company of manipulating accounts and deceiving the market and causing the collapse. of its shares on the stock market.
The regulator’s investigations “have not found evidence that allows us to conclude that the financial debt reflected by Grifols in its annual consolidated financial statements does not correspond to reality” but considers that there are “relevant deficiencies” in the “alternative measures of performance”, in particularly the operating profit or EBITDA and the ratio that measures debt with respect to EBITDA.
As a result of its investigation, the CNMV asks Grifols to expand the information on the criteria it uses to determine the companies it consolidates into its group and the relationships with related parties in the financial information it publishes in the future. The CNMV also requests that the firm publish in the coming days a detail of the EBITDA and the net financial debts of the last two years of the most relevant entities that it consolidates without controlling its capital, in reference to Haema and Biotest, the companies that own its plasma centers in Europe. The regulator also requires Grifols to explain the criteria it will use in its next financial reports so that its information responds to this additional requirement of transparency.
The report has been delayed for almost three months because the CNMV requested new clarifications and additional information from the Catalan company, especially about its relationship with the Scranton family holding company, on which Gotham’s accusations focus. Sources from the CNMV then indicated that the supervisor’s technicians “are looking at everything” to assess the situation, since “the veracity of the accounts of a listed company has been questioned.”
Since Gotham released its report on January 9, the Catalan company’s securities have lost 41% of their value, and the company has lost nearly 4 billion euros of its market capitalization. In the last two weeks, however, the shares have accumulated a rise of 33%, after the company got its auditor, KPMG, to support the accounts in an unqualified report.
Gotham’s accusations also triggered the taking of short positions on the company by other bearish funds, which has led the Catalan employers’ association, Foment del Treball, to request a change in European stock market regulation that would allow short positions to be stopped when they spread. interested information to manipulate the market, as in his opinion Gotham did.
Thus, on Tuesday the manager Janus Henderson joined the group of bearish funds that have borrowed Grifols shares and sold them waiting for a fall in the stock that will allow them to repurchase them cheaper with profits. Janus declared to the CNMV a bearish position of 0.53% of the capital, which is added to the 0.96% of the Qube fund, 0.52% of Millennium International, 0.51% of Ako Capital and 0.61 Marshall Wace %. These funds accumulate close to 3% of the company’s capital, but financial sources indicate that the bearish positions are much higher, since only funds that exceed 0.5% of the company’s capital have to report them.
