LatAm discrepancies add fuel to Codere’s governance dispute

Issuing a governance filing, Bolsa Madrid gambling group Codere SA has revealed that two executive directors have resigned in relation to the firm’s LatAm auditing discrepancies.

Last week, Spanish business news sources reported that Fernando Sempere Rodríguez had withdrawn from Codere governance responsibilities citing ‘a professional incompatibility’.

Sempere Rodriguez resignation follows the departure of board member Alberto Manzanares Secades on 7 October, the date in which Codere launched an investigation into the auditing.

Last month, Codere governance issued a correction statement to Spain’s CNMV markets authority detailing that the company had ‘overstated year-to-date accounts’ attached to a number of its LatAm subsidiaries.

Apologising to investors, Codere governance admitted that the EBITDA performance of its LatAm subsidiaries had been overstated by €13-18 million, which could see the company lower its 2019 corporate earnings guidance.

Further concerns see the LatAm discrepancies impact Codere’s ongoing boardroom dispute between the founding Martinez Sampedro family and the firm’s US private equity debt holders.

As executive directors, Sempere Rodriguez and Manzanares Secades were closely aligned to the Martinez Sampedro family, who are currently challenging the ownership of the company under the management US PE funds Silver Point, Contrarian and Abrams Capital.

Spanish news source La Razon reports that the executive resignations may have been undertaken in order to support the Martinez Sampedro’s pending Madrid CNMV challenge of company control against US debt holders.

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