Wednesday, October 20

The CNMV warns of the “reputational wear” for companies due to the Villarejo case

The president of the CNMV, Rodrigo Buenaventura.

The president of the CNMV, Rodrigo Buenaventura.

The president of the National Securities Market Commission (CNMV), Rodrigo Buenaventura, has warned this Friday of the “reputational wear” that may mean for the affected companies, but also for the set of companies quoted by “risk or deferred effect”, judicial indictments by the Villarejo case like that of the president of Iberdrola, Ignacio Sánchez Galán. “It is important for listed companies to take precautionary measures and those affected activate those of good corporate governance, be transparent and collaborate with the good reputation of listed companies “, he has defended.

In a conference of the APIE and UIMP, the head of the financial markets supervisor did not want to comment on whether the executives affected they must leave their posts: “That corresponds to listed companies and their owners.” He has also ensured that These are “isolated and individual” cases and that most Spanish companies have comparable “ethical standards” to those of the rest of European countries. But at the same time, he has warned that if this type of situation continues over time, as is happening in the different aspects of the ‘Villarejo case’ with other affected companies such as BBVA O Repsol, A feeling of mistrust can “spread” towards other large Spanish listed companies that “have nothing to do” with this type of behavior.

For this reason, Buenaventura has emphasized that the role of the CNMV is ensure that the affected companies “rethink what to do”, that is debated in its governing bodies and that the information is made available to shareholders and the market. Thus, he stressed that it is essential that the boards of directors, and in particular the independent directors, monitor compliance with the principles of good corporate governance and protect the interests of all shareholders, especially minority shareholders.

Image and reputation

The president of the CNMV has ratified “word for word” the statement issued by his institution in 2019, following the indictment of the former president of BBVA Francisco González for the ‘Villarejo case’. “Cases of alleged irregular practices in some listed companies that have become known in recent months, some of which have given rise to actions of the criminal jurisdiction, are matter of concern for the CNMV as the supervisory entity of the Spanish stock market. Although they only affect some companies or are attributable to a small number of people, this type of situation can compromise the image and reputation of our stock market, “said the body then chaired by Sebastián Albella.

In a statement to the CNMV, Iberdrola pointed out this Thursday that the board of directors and its delegated executive committee had “assessed the situation” generated by the imputation of its chairman and other executives and former executives and ratified its “support for the management carried out” of the case by the company’s management. The power company assured that it was also “agreed (on May 25) to consider the obligations established” in the internal and public governance systems as duly fulfilled “in the event that any member of the board of directors was called as being investigated in the procedure. criminal, without the adoption of any measure being deemed necessary “.

Fraud Peak

Buenaventura, on the other hand, has warned that his institution is registering a “historical peak” in the number of inquiries and claims between February and May, for behaviors that are sometimes “illegal and even criminal activities”, and that many of these Investor requests refer to cases related to crypto assets, “the fashionable asset.” Likewise, it has quantified in 800 million euros the damages currently claimed in the National Court.

Along these lines, it has confirmed that the CNMV is working with the Ministry of Economy and other institutions to improve investigation and prosecution of fraudulent conduct related to financial services. “Financial fraud is like a globe, is growing and the question is puncture it as soon as possible, because we will never be able to eradicate the behavior. The point is to detect it before it acquires a dimension in which the social damage is very important, “he explained.

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