The Superior Court of Justice (TSJ) has agreed with the DIA group and has rejected the appeal presented by the former “number two” of the company, Loving Sánchez Falcón, who considered that his dismissal at the end of 2018 was unfair.
In the sentence, the judges confirm a previous ruling of the Social Court number 11 of Madrid, and corroborate that Sánchez Falcón was at least “aware” of the accounting irregularities detected within the group in 2018 to make up his results, and that despite this he gave his approval.
Sánchez worked for DIA between 2012 and 2018 under the position of Corporate Executive Director, and among his functions was that of being the head of operations in Portugal and leading the financial area of the company.
In fact, he reported directly to the then CEO, Ricardo Currás, who along with other executives of the time was also fired; all of them are being investigated in the framework of another judicial procedure opened specifically on the aforementioned irregularities and which is still in the investigation phase.
The Supreme Court ruling recalls that the “accounting irregularities in the 2017 annual accounts artificially increased the Profit before tax“from DIA, then a company listed on the IBEX 35, and assumes that Sánchez knew the mechanisms used to achieve these improvements.
One of the ways was to unjustifiably eliminate provisions of pending invoices from some suppliers and certain payments to reflect a lower debt for DIA, a ploy that in the opinion of the court the manager consented, as is evident in several emails to which he had access. The measure had an impact on the 2017 Ebitda of 30 million euros.
Another irregularity was that of post an unwarranted revenue forecast Through the Swiss company DWT for 6.3 million euros, taking advantage of the fact that this subsidiary was not audited, which led those responsible for DWT to officially notify Sánchez Falcón of their refusal to sign the accounts.
DIA began to investigate the events after Currás was dismissed as CEO and his replacement by Antonio Coto, in August 2018.
In mid-October of that same year the company “suspended the actor from employment to facilitate the investigation“, and a month later he delivered a letter of disciplinary dismissal for” transgressing good contractual faith and for breach of trust. ”
The ruling recalls that Sánchez Falcón signed the 2017 accounts despite being aware that they did not reflect reality and was in charge of presenting and delivering the results to the Board of Directors and the Audit and Compliance committee.
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