Ex Gowex CEO could face over ten years in prison for account fraud
The former CEO of bankrupt Spanish telecom giant Gowex was today told by a high court judge he could face a jail sentence of over 10 years for account fraud – which brought the company to its knees.
The CEO admitted to four years of account discrepancies
Former chief executive and chairman Jenaro Garcia Martin was charged with false accounting, distortion of economic and financial information, and insider trading.
The ex-CEO stepped down from his position last week after a US brokerage firm released a report saying the company's stocks were worth less than a tenth of what they were valued. This resulted in £690m being wiped from the market value of Gowex before trade was suspended due to investigation.
After his testimony today at the High Court Garcia, Martin’s passport was seized. Futhermore, he was given 15 days to pay £480,000 or face jail.
The High Court examining judge Santiago Pedraz feared the accused would run from his lengthy jail sentence so imposed an order requiring him to remain in Spain.
It also emerged that Garcia Martin had under £3m in a Luxembourg-based bank account.
Gowex has entered "imminent insolvency" and faces a "financial standstill" after high profile contracts were canceled.
After the company commenced insolvency proceedings last week, they expressed "shock" at Garcia Martin's revelations.
Gowex have four months to satisfy creditors before it enters administration.