EIDF (Energy, Innovation and Photovoltaic Development) will again occupy a prominent place on the price panels of the Spanish stock market this Monday. There, in the BME Growth segment, it has been listed with brilliant success from July 7, 2021 to April 14, 2023, until accumulating a 609% revaluation on the stock market. At the time of the suspension 136 days ago, the company had a market capitalization of 1,721 million euros, more than Ibex 35 values such as Solaria or Meliá.
It will be a controversial comeback and one that is presumed to be troubled by the reaction that shareholders who have seen their investment blocked in recent months may have. The National Securities Market Commission (CNMV) decided to unblock its listing last week after the publication of the company’s reformulated accounts, the mandatory PWC audit and the ‘forensic’ report that the latter commissioned from its rival Deloitte to detect the accounting irregularities that forced the suspension of the stock market on April 14.
The problem has come from the way to do it. EiDF decided to upload all the reports at once, causing confusion among investors, but also accompanied the ‘forensic’ with comments and assessments from its president, CEO and main shareholder, Fernando Romero, as published by ‘La Información’ last week. These valuations minimize the scope of accounting changes or irregularities committed during the management of the last year.
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The CNMV has sent a request to the company to publish separately only the documents from the Deloitte report that refer to the related parties -a brother of the president was a partner in one of the subsidiaries that was acquired by EiDF-, but above all to the accounting gaps pending to be resolved, as well as to the recommendation for a restructuring of the leadership and the board of directors. But Romero and his team have refused to do so.
“We cannot accept that, in the summary disclosed by EiDF of the forensic report, relevant data is hidden from the market,” reproaches the supervisor chaired by Rodrigo Buenaventura. On the other hand, EiDF does not comply with the CNMV’s recommendation because, in reality, it has no jurisdiction over the company in this matter. And he is right, according to what financial sources explain to ‘La Información’. The actual supervisor is Six/BME (Bolsas y Mercados Españoles). He is the one who manages and supervises the BME Growth segment in which EiDF is listed and which is reserved for growing companies with medium or small capitalization. The Galician firm was in the process of going on the Continuous Market, under the supervision of the CNMV, but has not yet done so.
In this regulatory limbo those responsible for EiDF take refuge to raise a fight and respond to the reproaches of the CNMV with their own complaint. “As has been said, there is nothing in the publication that is not included in the report or that deviates from its content, fully realizing all the basic conclusions reached in it,” comments Fernando Romero in his response to the request . It is an unusual pulse that will begin to be resolved today on the stock market.
“A different thing is that, suddenly, the CNMV changes its mind and, instead of a forensic summary, is interested -once the accounts for the 2022 financial year have been audited and published, the only reason on which the suspension of the listing was based of the EiDF titles, decreed on April 14, by a literal reproduction of passages that the supervisor has previously selected -at his discretion- or of the entire executive summary of the coroner in question, which supposes an “imposition “of what has to be published, without any margin of freedom for the company,” adds the executive in his allegations.
Romero relies on a supposed right to freedom of expression in the dissemination of financial information that the law does not include: “That being the case, accepting this imposition would mean, on the one hand, recognizing what this company has never done – nor will it do , that is, to hide relevant information from the market, and on the other, to turn this company into a kind of material disseminator of what will proceed to the publication of the exhaustive formulas imposed in the request filed by the CNMV, and this body must act in the form that is considered appropriate, without counting, for this purpose, with the authorization of this party”