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Gullón, in trouble with its auditors

Teresa Sánchez

The legal problems involving a battle to control the company that have plagued the Gullón family for years continue to be very costly, more than a year after a peaceful solution was found. In the most recent financial statements (2013) submitted by the company to the Mercantile Registry, the auditor, Esfera 4 Auditores, included a qualification after not being able to access information on lawyer fees paid for the lawsuit and, therefore, not being aware of the impact on the financial statements.

"On the date this report was issued, it is unknown whether there are claims other than those contained in the consolidated report attached and in this report which may affect the consolidated financial statements. Likewise, we have been unable to check or confirm the amounts accrued or pending collection at 31 December 2013 by the above-mentioned law firms which provided services to the parent company. As a result, we do not know if any provisions much be booked for said item," said the auditors. Logically, the publication of financial statements for 2014 is still pending, once they have been approved and audited.

Esfera 4 Auditores requested information about the corresponding lawyer fees from five firms, none of which responded despite their obligation to do so. According to the auditor's report, the following law firms were contacted: José Eugenio Rodríguez Rodríguez, Cancio Nadal Rivera & Diaz, Garrigues, Estudio Jurídico Rodríguez Mourullo and Ángeles Armisen.

The Chairman of Galletas Gullón, María Teresa Rodríguez Sáinz-Rozas, widow of the founder of the company based in Aguilar de Campoo (Palencia), was relieved of her position as the Chairman of the Board of Directors in September 2009 and was named Honorary Chairman one month later.

It occurred at a meeting where the board, controlled by her three sons (Félix, Hernán and Rubén Gullón Rodríguez) and two brothers (Félix and Raúl Rodríguez), also agreed to dismiss Juan Miguel Martínez Gabaldón who was, up until that point, Managing Director of the company and the Chairman's right-hand man.

The "rebellious" part of the family alleged that it no longer trusted him as manager, and the Board of Directors, which was controlled by the "rebels", even accused Gabaldón of "irregular purchases" of the land where one of the factories is located, and of acquiring company shares without its knowledge. As a result, it pursued criminal charges against him, including one criminal complaint for alleged embezzlement and fraud.

The legal battle between the two sides of the family comprising the shareholder structure was long and arduous. Martínez Gabaldón presented a claim in the courts of Palencia for wrongful dismissal, and they ruled in his favor. As a result, the cookie company was sentenced to pay an indemnity of 9.19 million euros, along with interest and the corresponding procedural costs.

At the same time, Galletas Gullón, still controlled by the Rodríguez sons, sued Martínez Gabaldón and his wife, demanding that they return their stake in the company under the premise that they had violated its bylaws.

They also filed a lawsuit against the former Executive Chairman at that time to demand an end to her right to own the shares she held. Her sons believed that part of the shares belonged to them, as an inheritance from their father, and they wanted to definitively ensure they had control of the company.

But that didn't happen. María Teresa Rodríguez Sáinz-Rozas, who was still the core shareholder of Gullón, recovered control of the company less than a year later, in October 2010. Previously, and using her position as majority shareholder, she was forced to call an extraordinary shareholders' meeting, which was held inside a car, outside the Aguilar de Campoo factory, as the rest of her family refused to let her enter the building.

The resolutions from that meeting, in September of 2010, are registered in the Mercantile Registry in Palencia, when Rodríguez Sáinz-Rozas officially took the possession of the company, once again, as sole director.

The court battles continued for years until, in 2014, the Chairman of Gullón, who until then resisted leaving the company in the hands of her children ("I will leave it to them one day, but when I say so" she often said), made a peace offering.

María Teresa's sons (throughout the process, only her daughter Lourdes stood by her side), agreed to withdraw the lawsuits filed against the Managing Director for alleged forgery and embezzlement, and in exchange, the Chairman allowed them to join the Board of Directors again. However, her brothers, Félix and Raúl Rodríguez, were not allowed back into the group and have not formed part of the company’s new era; their alliance against her cost them dearly.

This resulted in the following ownership structure for Galletas Gullón: María Teresa Rodríguez (55.29%), Juan Miguel Martínez Gabaldón (16%), her children Hernán, Rubén, Félix and Lourdes Gullón Rodríguez (3.86% each), and own shares (10.49%); the remainder is owned by minority shareholders (2.78%).

Despite the battles and the qualification in its financial statements, Gullón's financial situation remains very positive. Pending 2014 figures, the company had net equity of 200.3 million euros at 31 December 2013. Revenues increased by 18.9%, to 257.4 million euros, and net profit rose by 37%, to 23.7 million euros.

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