Wifi firm Gowex says results fake, heads to bankruptcy

Jul 06, 2014
People walk past a kiosk with an advertisement for wifi provider Gowex in Madrid, on July 3, 2014

Spanish free wifi provider Let's Gowex revealed Sunday its accounts have been falsified for at least four years and it is filing for bankruptcy protection.

Gowex, which offers wifi services in world capitals including Paris and New York, made the devastating admission after days of protesting that a damaging US report on its operations was incorrect and defamatory.

Gowex president Jenaro Garcia Martin informed his board the previous day that, in fact, he had faked the company's results, the firm said in a statement released by Madrid's Alternative Equity Market.

"Garcia Martin, chief executive and president, said before several that the company accounts for at least the last four years do not reflect the true picture, attributing this falsehood to himself," Gowex said.

Board members revoked the 's powers and accepted his resignation, it said.

"The board, confronted by the expectation that the company would not be able to cope with its maturing current debt payments, agreed to file a voluntary request for bankruptcy."

Gowex had been expected to give a detailed response on Monday to allegations about its operations, which had sent its shares plunging 60.2 percent to 7.92 euros in two days before they were suspended from trade by Madrid's junior stock market, the Alternative Equity Market.

US firm Gotham City Research sparked the freefall Tuesday by publishing a highly critical report, which had previously been described by Gowex as "unfounded and defamatory".

Gotham City Research called Gowex a "charade" and said its revenues were far lower than the company had reported. Gotham City said its target price for Gowex shares was zero.

Only on Wednesday, Gowex had issued a statement confirming its 2013 revenues of 182.6 million euros ($249 million) and stressing that the figures had been audited.

Explore further: India's Infosys drops seven percent as top exec quits

add to favorites email to friend print save as pdf

Related Stories

Yahoo takes hit after Alibaba IPO filing

May 07, 2014

Yahoo shares tumbled Wednesday on concerns its stake in Alibaba may be worth less than anticipated following the Chinese online giant's stock market offering.

Soft maker Deltek to be taken private for $890.5M

Aug 27, 2012

(AP)—Deltek Inc. shares slid nearly 8 percent Monday after the business software company said that it was being bought by private equity firm Thoma Bravo LLC in a cash deal worth about $890.5 million.

ISS seeks ouster of most of Target's board

May 28, 2014

A prominent proxy advisory firm has recommended that Target shareholders vote out seven of its 10 board members after a massive pre-Christmas data breach.

Recommended for you

Out-of-patience investors sell off Amazon

1 hour ago

Amazon has long acted like an ideal customer on its own website: a freewheeling big spender with no worries about balancing a checkbook. Investors confident in founder and CEO Jeff Bezos' invest-and-expand ...

States ascend into the cloud

7 hours ago

Seven years ago, the state of Delaware started moving computer servers out of closets and from under workers' desks to create a consolidated data center and a virtual computing climate.

Microsoft drops Nokia name from smartphones

9 hours ago

Microsoft said Friday it was dropping the Nokia name from its Lumia smartphones, rebranding following the acquisition earlier this year of the Finnish group's handset division.

Amazon's loss makes holidays a question mark

10 hours ago

Amazon's trademark smile icon is becoming more of a grimace. The world's largest online retailer reported a wider third-quarter loss than analysts expected and gave a disappointing holiday forecast.

User comments : 0