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The Catalan pharmaceutical company Grifols experienced a nightmare session on the stock exchange this Tuesday with a fall of 25.90% at the close of the IBEX 35 trading session, after the consultancy Gotham City Research accused the multinational of manipulating its accounts to hide its debt, which according to them is much larger than reported. The share price plunge reached 40% during the early hours of trading, when the firm released its report, but moderated throughout the day, in which Grifols made a statement denying the accusations and Spain's National Securities Market Commission (CNMV) declared that it will "clarify" the situation, while ruling out a suspension of trading.

The market capitalization of Grifols has fallen from 8,711 million to 6,377 million euros and the share price from 14.24 euros to €10.42. Gotham City Research was created in 2012 and has an extensive track record of detecting accounting fraud, but it is a bearish analyst firm with its own interests in the stock market. In fact, Gotham owner Daniel Yu bet 34 million euros against Grifols before publishing the report and the Catalan pharmaceutical company accuses him of wanting to sink its share price in order to obtain financial benefit.

The report by Gotham City Research, a firm that also brought down the Spanish telecoms firm Gowex in 2014, singled out the Barcelona-based pharma firm in a report entitled Grifols SA: Scranton and the Undisclosed Debts. In it, the consultancy asserted that Grifols "manipulates debt and EBITDA to artificially reduce leverage". Grifols, according to the report, quoted leverage of 6 times the value of its EBITDA, but in reality the ratio is between 10 and 13 times the value of this earnings measure.

Gotham also claims that the Catalan blood-plasma specialist made transactions that do not appear in its accounts and only in those of Scranton Enterprise, one of the companies through which the Grifols family controls the company.

During an intense day both in the firm's offices and on the trading floor, Grifols came out in its own defence and "categorically" denied the accusations. "As a company committed to transparency, integrity and ethical conduct, we categorically deny and reject any accusation of accounting practices or erroneous information in our consolidated financial statements", the company highlighted to the CNMV. The pharma company later insisted in a statement that all accounts have been audited and are public.

However, and despite the fact that the Gotham boss had also bet large sums against the company before the report was issued, there has been a knock-on effect on the markets. Not only on the IBEX, but also on the US Nasdaq, where the Catalan firm is also listed. There, it started the day with a drop of 33% which soon after corrected to 27%, a figure similar to the drop of the IBEX at the close of the session.