Jul
14
After years of posting growing sales, amounting to 1.7 billion euros (US$2.2 billion) in 2011, the group that was among the world industry’s leaders and the pride of the northern region of Galicia has plunged into scandal.
One evening in February, Pescanova was forced to reveal that it could not publish its 2012 accounts.
Two months later, on April 25, it filed for bankruptcy.
“That was a surprise,” said Francisco Vilar, regional secretary of the food-processing federation of the main union at Pescanova, the Workers’ Commissions (CCOO).
“People who work here have been here for 30, 40 years, with good management. So it was an enormous surprise.”
Pescanova is accused of false billing, hiding a debt of 3.3 billion euros that was more than double the declared figure, and its top managers of selling shares just before the scandal broke.
“It’s Enron, Spanish style,” said one banking source, referring to the giant U.S. energy group that collapsed in the 2000s in one of the biggest financial scandals in U.S. corporate history.
“There was a tangle of subsidiaries set up solely and uniquely to hide the debt,” the source said.
The group had more than 100 offshoots, in many of which the group held less than 50 percent of the equity to as to avoid including their debts in its accounts.
To pay for an all-out investment program, from salmon farms in Chile to prawn preparation centers in Ecuador, the group “would go to different banks in the world to ask for credit, using the image and reputation of Pescanova, and everyone gave it to them, which was logical because they were industry leaders,” said one source close to the company.
Banco Sabadell, Banco Popular, Deutsche Bank, Commerzbank, but also banks in Namibia, Bolivia, or the island of Mauritius: more than 100 banks loaned money to the frozen fish giant, which boasts of inventing refrigerated shipping in the 1960s.
Now the Pescanova president, Manuel Fernandez de Sousa, is being investigated for suspected false accounting and insider trading. Auditors Deloitte and KPMG have been tasked to look into its accounts.
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