Grifols CEO denies fraud allegations and commits to improve company governance
Thomas Glanzmann says claims in short seller's report are 'false'
Spain's National Securities Market Commission (CNMV) is investigating the relationship between Grifols and its shareholder Scranton after a short seller accused the company of manipulating its accounts.
The CEO of Grifols, Thomas Glanzmann, denied on Thursday that Scranton is a "family office" and explained that Scranton only has two "specific collaborations" with the Catalan multinational.
In a 50-minute conference call with investors, Glanzmann expressed his openness to improving the company's governance and detailed that Scranton has 22 investors, of which only three are from the Grifols family, accounting for less than 20% of the shares.
Glanzmann acknowledged that the CNMV had requested information from them and committed to providing it soon.
He said Gotham City Research's accusations were false and criticized them for "reusing financial information that has been publicly available for years and has already been audited and validated by regulators and international auditing firms.”
Shares of Catalan drugmaker Grifols rebounded nearly 12% on Wednesday after the company said it would take legal action against Gotham City Research, but the shares fell again by about 14% on Thursday.
Gotham's report, published on Tuesday, sent Grifols' share price plummeting initially by more than 40%, wiping out €2.28bn from its market value.
The document states that Grifols "manipulated reported debt and [earnings] to artificially reduce reported leverage," and that the company's shares were worth "zero".
The hedge fund said it believes that Grifols' debt is closer to 10x-13x, rather than the reported leverage of 6x.
The US firm sold a part of the package of shares it held in the pharmaceutical company before publishing the report that caused the shares to plummet.
Yesterday, Gotham bought back some of the shares it sold at a much lower price. This operation earned Grifols millions of dollars in profits, according to the CNMV.