MADRID (Reuters) - A Spanish magistrate has launched a criminal investigation into suspected account-fiddling at retailer Dia DIDA.MC under its previous management, before Russian oligarch Mikhail Fridman took over the near-insolvent company last year.
Magistrate Alejandro Abascal said in court documents seen by Reuters that he was looking into whether the company’s management, including then-CEO Ricardo Curras, manipulated Dia’s pre-tax earnings data in 2017 to make it falsely appear the company had reached financial targets.
The plan, which court documents allege Curras had masterminded in order to justify his annual bonus, saw Dia’s 2017 EBITDA inflated by over 51 million euros ($57 million).
Abascal will summon Curras, alongside former Dia senior executives and an external auditor from consultancy firm KPMG, to appear in court.
Curras told Reuters he would not comment on the case.
Separately, Spanish markets regulator CNMV said on Wednesday it had launched a probe into a “very serious infringement” by Dia and its former management - including Curras - for filing “inaccurate or untrue financial information” in 2016 and 2017.
The markets watchdog, however, said it would pause its own probe while the criminal investigation unfolds.
A Dia spokeswoman said that “as of today the company has not been notified that it is involved, as a company, in the process, and would in any case be another party injured” by the alleged former managers’ wrongdoings.
The criminal investigation stemmed from an incident last May, when Dia shareholders questioned the veracity of the company’s 2017 accounts.
The accounts had been revised in October 2018, sending Dia’s share price down to historic lows they have yet to recover from.
At the time, Dia’s financial situation deteriorated as it struggled to keep up with rising competition from other supermarket chains, and in 2019, Fridman snatched the company back from the brink of insolvency.
In October, Spain’s Supreme Court told the High Court to investigate allegations that Fridman had acted to depress the share price of DIA when trying to take control of the supermarket chain. Fridman has denied wrongdoing.
Reporting by Clara-Laeila Laudette and Tomas Cobos; writing by Clara-Laeila Laudette; editing by Inti Landauro and Susan Fenton
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