- SMB Spotlight
A Spanish WiFi firm called Gowex that supplied wireless services to cities across the world has filed for bankruptcy after its CEO admitted to years of false accounts.
Gowex was subject to a damning report last week from a research group called Gotham City Research. It called Gowex a ‘charade’ and said the company's shares were worthless.
“Over 90 percent of Gowex’s reported revenues do not exist. We estimate GOW’s actual revenues to be < €10 million,” it said. "We have evidence Gowex's largest customer was really itself.”
Initially Gowex dismissed the claims as “unfounded” but on Sunday a statement acknowledged that for at least four years the firm’s accounts were false.
“The board of directors of the company announces that on July 5 2014, at 16:00, at the company's offices, Mr Jenaro García Martin, chief executive officer and president of the board, has declared in the presence of different board members that the financial accounts of the company for the last four years, at least, do not show a full and fair view of the company’s situation, taking responsibility for this falsity.”
Martin has also resigned and the board has filed for bankruptcy: "The Board, anticipating that the company might not be in a position to face its ongoing debts when they become due, has agreed to file for a declaration of voluntary insolvency."
Martin also took to Twitter to admit to his actions.
I made the deposition and confession. I want to collaborate with the justice. I face the consecuencies.— Jenaro Garcia (@jero_net) July 6, 2014
Staff at the UK branch of the company in Basingstoke confirmed to V3 that they were aware of the situation but did not offer any comment.
The incident will add the firm to a list of infamous financial scammers in the tech industry, such as the former CEO of CA Sanjay Kumar, who was involved in $2bn accounting fraud that landed him with a 12-year jail term.