Economic news

Gotham Maintains Questions over Grifols' Accounts, Shares Fall

  • Gotham focuses on links between Grifols and Scranton
  • Grifols "categorically" rejects "false" insinuations
  • Shares fall 3.2%

MADRID, Feb 20 (Reuters) - Short-seller fund Gotham City Research on Tuesday issued a second report on Grifols, maintaining some of its questions over the Spanish pharmaceutical company's accounting practices, dragging its shares down.

Gotham City's new report focuses on the links between Grifols and Scranton Enterprises NV, an investment vehicle partly linked with the Grifols' founding family.

In a statement, Grifols again rejected Gotham's "malicious, false and misleading insinuations" that had the "sole objective of destabilising Grifols and causing doubts amongst institutional investors".

Grifols shares have fallen by around 23% since Gotham City published its first report on Jan. 9, questioning the size of the company's debt, wiping around 2 billion euros ($2.15 billion) off its value.

Its shares were 3.2% down at midday on Tuesday, after partly recovering over the past two weeks.

Since Gotham City's first report, Grifols has made changes to its corporate governance, mainly withdrawing members of the founding Grifols family from executive jobs.

But the short seller said on Tuesday that the management changes made by Grifols since its first report last month "indicate to us that at least some of our concerns are valid".

Grifols said it continued to pursue its litigation of Gotham. It has filed a U.S. lawsuit against Gotham City founder Daniel Yu and the company, seeking damages.

In its report on Tuesday, Gotham suggested the Grifols family had controlled 70% of Scranton, based on information Gotham says was submitted to regulators in 2011.

Last month, Grifols outgoing CEO Thomas Glanzmann, who will remain executive chairman in the reshuffle, said that the family holds less than 20% of Scranton and that interactions between Grifols and Scranton have been made "at arm's length".

Spain's stock market supervisor CNMV said last month it could take weeks to reach a conclusion on allegations made by Gotham. It also said it was looking into whether Gotham had complied with European regulations on market abuse.

($1 = 0.9286 euros)

Reporting by Inti Landauro and Jesús Aguado; editing by Kirsten Donovan and Ros Russell

Source: Reuters

To leave a comment you must or Join us

More news

Back to economic news list

By visiting our website and services, you agree to the conditions of use of cookies. Learn more
I agree