Lets Gowex SA, a Spanish Wi-Fi provider, intends to file for bankruptcy protection. The company also reported that its Chief Executive Officer is leaving, after admitting that he falsified accounts for at least the past four years.
The board of Lets Gowex SA announced that it accepted the resignation of its CEO and founder Jenaro Garcia Martin. Mr. Garcia Martin commented on a post on Twitter, which was cited by the Financial Times: “I made a voluntary confession in court. I want to collaborate with justice. I will face the consequences.” In an earlier message the former Chief Executive Officer of the company said: “I ask everyone for forgiveness. I am deeply sorry.”
The companys collapse is considered to affect the investors confidence in the Spanish stock market, as well as in its regulatory authorities. Lets Gowex SAs shares have been collapsing since July 1st, when the company was declared worthless by the short-seller Gotham City Research LLC.
The accelerated growth of the start-up resulted in more than doubling the companys market capitalization before Gowex went public in 2010. However, the company decided to to file for bankruptcy after the ex- Chief Executive Officer and Founder made “a voluntary confession in court” that the companys performance was not reflected faithfully over at least the past four years.
At first, Mr. Garcia denied the charges and said that Gotham City Research LLC is trying to benefit from a short-selling strategy. Eventually, as reported by the Wall Street Journal, Gotham admitted that it “stands to profit in the event the issuers stock declines”. Following the news, the shares of Lets Gowes SA collapsed, resulting into the company losing most of its market value. The stock has been halted from trading since July 3 and will remain suspended today.