Spanish wireless networks provider Gowex, at the heart of an accounting fraud scandal that has hit Spain's reputation among investors, has started insolvency proceedings, say lawyers. David Pollard reports
Its name once stood for success. That is, until former boss Jenaro Garcia Martin admitted cooking the books. Now Gowex is at the heart of an accounting fraud - and lawyers have confirmed they've filed for bankruptcy. While Martin remains silent. ''I'm not going to make any statements,'' he said. At the same time, Gowex workers came out on to the streets of Madrid to say they wanted to keep the company going. A spokesman saying he and his 150 colleagues were completely helpless. SOUNDBITE (Spanish) SPOKESMAN FOR GOWEX EMPLOYEES WHO DECLINED TO PROVIDE HIS NAME, SAYING: ''We urge rapid action by the justice authorities and the company's directors in order to minimize the damage already caused so that activity can get back to normal. We want to reiterate that we are still in the normal course of our duties.'' Martin resigned after initially denying the allegations. And saying legal action would follow against Gotham City Research who first suggested them in a report. That report triggered a 60% collapse in the Gowex share price before trading was suspended. Filing for bankruptcy means Gowex has four months to reach a deal with creditors or enter into administration. Its workforce say they want to take matters into their own hands. SOUNDBITE (Spanish) SPOKESMAN FOR GOWEX EMPLOYEES WHO DECLINED TO PROVIDE HIS NAME, SAYING: "We have organised ourselves with the objective of taking the necessary legal action to defend our interests and for the sake and continuity of the business. We are studying proposals by several lawyers and we have made the decision to hire a law firm to advise us regarding actions to be taken in the future." The wireless networks provider was a poster child of Spain's economic rehabilitation. In just two years, its market value soared over twenty-fold. Gowex was among a crop of firms to raise funds via Spain's alternative stock market, the MAB. It's considered less transparent than the benchmark Ibex. The bourse watchdog has said it will investigate potential market abuse.