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View the article online at http://citywire.co.uk/wealth-manager/article/a760431

Spanish telco admits falsifying accounts post-Gotham City report

by Danielle Levy on Jul 07, 2014 at 07:40

Gotham City Research, the short-seller that led a bear raid on Quindell, has forced Spanish WiFi provider Gowex to declare bankruptcy.

Gowex admitted its chief executive and founder had falsified the company’s accounts for at least the past four years, the FT reported.

In a statement, the board of Gowex said it had accepted the resignation of Jenaro García Martín, who has taken full responsibility for fake accounts.

Gowex said it had also hired PriceWaterhouseCoopers to carry out a forensic audit of its accounts in response to Gotham’s note.

Short sellers, such as Valiant Capital, have borrowed 2.8 per cent of Gowex’s share capital, and are set to profit from the company’s collapse.

The move follows the short-seller's claim that over 90% of Gowex's reported revenues do not exist.

In a note, Gotham predicted Gowex’s shares will be suspended and issued a target price of €0.00.

Gotham rose to prominence in April when it issued a damning dossier on Quindell, which led to the insurer’s share price plunging by as much as 52% on the day.


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