The National Securities Market Commission (CNMV) has accused EiDF Solar of not having given the market complete information, omitting the executive summary of the forensic report carried out by Deloitte, and of having carried out “very relevant omissions”.
The stock market supervisor has made public this Thursday a requirement that he sent to the company on August 21 in which he informed him that the information that the company presented last week, with its accounts reformulated after more than four months suspended from listing, it was incomplete and could ‘mislead the public’.
The body chaired by Rodrigo Buenaventura warned the company led by Fernando Romero that Deloitte’s forensic report included a report of facts and evidence “of great importance” for EiDF shareholders.
It highlighted the evidence of “possible falsification of documents by the company, given their special relevance.” In this regard, it added that PwC, the auditor of the group’s accounts, had taken this forensic into account in its work “which has materialized, among other aspects, in a limitation to the scope of its audit opinion, given the weaknesses of internal control identified in the forensic in these matters”.
Last week, EiDF presented its restated accounts corresponding to the financial year 2022. The group, due to discrepancies with its auditor PwC, was unable to present its accounts for the past financial year within the legal term, which expired at the end of April, and contracted , subsequently, the services of Deloitte to carry out “an investigation aimed at analyzing and gathering evidence related to incidents and/or discrepancies” maintained with PwC in the audit process of its accounts last year.
After the presentation of these accounts, the CNMV urged, in a letter of requirement, EiDF so that, “as soon as possible” and no later than 8:00 a.m. on Thursday, August 24, publish the additional information requested and the content Full executive summary of the forensic report.
As this period has expired without the company responding to this request, the supervisor has thus proceeded to publish the additional information request that he sent a few days ago.
Likewise, with the publication of this information requirement, the CNMV has agreed to lift, effective Monday, August 28, the precautionary suspension, which had weighed on the company since April 14, from its trading on BME Growth, ” as a consequence of privileged information having been made available to the public regarding the circumstances that advised the adoption of the suspension agreement.”
“Such information includes the communications of privileged information made from the date of the suspension by the issuing company itself and the additional requirement of the CNMV, not attended by the company, published by BME Growth dated today,” he added.
Specifically, the information required by the CNMV dealt with facts such as the fact that the report mentioned that “in some of the activities and transactions with third parties analyzed, situations have been identified in which documents have been created, modified or falsified.”
Likewise, it was pointed out that all the debtors included in the scope of the forensic presented “a direct and indirect link with Fernando Romero, the group’s largest shareholder, and that, according to the report, “numerous incidents related, among other issues, to invoices and payments for services that may not have been provided or not justified, as well as the falsification of documents”.
In this sense, referring to the forensic report, he warns that some debtor “would have issued invoices that did not correspond to services actually provided, so they could be false invoices.”
Similarly, the CNMV requested information regarding possible discrepancies between costs recorded in accounting and the actual degree of progress of the work included in the report.
Additionally, the CNMV asked EiDF to communicate that it will hire a new CEO, as stated in the information it published on August 17. In this case, the company did send a statement last night in which it indicated that the reorganization of executive functions that it announced implies the hiring of a new director or CEO and that the maximum period to complete the incorporation process will be six months.
This Wednesday, EiDF defended that the measures it has already adopted would allow its negative working capital to be positive at 3.3 million euros in 2022.
In information sent to BME Growth, it detailed the measures adopted so that this working capital -which indicates short-term liquidity and its ability to make the necessary investments or purchases in its day-to-day operation- presents a positive balance.
In the reformulation of the 2022 accounts, the PwC auditor warned that the company had a negative working capital amounting to 20.9 million euros.
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