García Carrión sues BNP Paribas after losing 75 million in foreign exchange operations



The negative balance of thousands of operations carried out in the foreign exchange market has left a significant hole in the accounts of the García Carrión wine group. According to the British newspaper Financial times and this newspaper has confirmed, the Murcian company, owner of brands such as Don Simón, lost about 75 million euros between 2012 and 2018 in derivative transactions carried out through the French bank BNP Paribas. The company, which also sells juice and gazpacho, does not assume responsibility for these ruinous transactions: it blames the financial institution for carrying out the operations illegally, and demands financial compensation. He also points to his former financial director, Félix Villaverde, a former henchman, already fired after almost 30 years on the staff. “It was only authorized to carry out operations of up to one million euros,” say company sources.

The intermediation reported income to BNP Paribas of around 100 million euros, a high amount that, according to García Carrión, should have caught the bank’s attention as it came from a single client, but it was not, and the Spanish company did not receive any notice. , for which he has sued both his former manager and the bank to recover part of the lost money. This was explained in a statement released today: “García Carrión will claim financial compensation for the losses caused illegitimately by BNP Paribas and for the benefits obtained at his expense and without his authorization. Unauthorized operations will not have an impact on the income statement. The company has solid own funds ”. The firm, well established in the low-priced wine and cava segments, had a turnover of 855 million euros in 2019.

Many multinationals use derivatives to hedge the risks of operating with several currencies subject to market fluctuations, but in this case not only dollars were bought and sold, but also smaller currencies, such as the Swedish krona, a country where the group hardly has any presence. Based on examples like that, García Carrión’s internal investigation has concluded that unnecessary risks were taken to hedge the exchange rate, and many of the 8,400 operations registered in those five years – an average of six a day – would therefore have been more linked to speculative investment in search of a return that did not arrive.

From the firm they are surprised that the auditors did not detect the case in their account reviews. This is how José García Carrión, its president and owner, expresses it to this newspaper, while insisting that the case has not made the firm lose credibility: “The banks maintain confidence in the company, as they have shown by renewing the syndicated loans.” , defends. The group reached an agreement with the bank in December to refinance loans for 400 million and extend their maturity until 2026.

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BNP Paribas is not the only bank with which García Carrión has an open dispute over a practically identical matter. The Spanish company filed a lawsuit before the court of first instance of Jumilla (Murcia) against Goldman Sachs, Bankia, its former financial director Félix Villaverde, and his son, Carlos Villaverde, for the alleged execution of foreign currency operations “without authorization nor powers of representation ”. The case is also circulating in parallel through the British courts, where García Carrión and Goldman Sachs exchange complaints: the investment bank accuses the winery group of not paying the amounts derived from these operations. For his part, García Carrión points out to Goldman Sachs and Bankia for having continued executing operations with derivatives by order of Villaverde despite the fact that Villaverde did not have the powers to move the group’s funds.

García Carrión is having a busy year on the judicial front. In April, the National Court opened an investigation against four wineries, —among them the Murcian, but also Felix Solís, Navarro López and Fernández Castro— for fraud, misleading advertising and false documents. The investigations came after a complaint from the prosecution, which accuses them of selling wines as crianza, reserva and gran reserva wines that did not meet the requirements for their elaboration, neither in a minimum period of aging, nor in the permanence in the barrel. oak, nor bottled.

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