Wi-Fi provider Gowex is filing for bankruptcy after its CEO took full responsibility for falsifying the company's accounts over the past four years.
The Madrid-based company's board of directors has accepted CEO and founder Jenaro Garcia Martin's resignation just days after Gotham City Research alleged that 90% of Gowex's revenues were falsified and the shares were worthless.
Gowex, which has offices in London, Madrid and Paris, had first denied the allegations and threatened to take legal action against the research firm, but on Sunday CEO Garcia Martin quit, taking full responsibility for the claims.
"Mr Garcia Martin, CEO and chairman, has told several board members that the accounts of the company, for at least the last four years, were unfaithful and that he was responsible for this misrepresentation. The board has accepted his resignation," the company said in a statement.
"The board, confronted by the expectation that the company would not be able to cope with its maturing current debt payments, agreed to file a voluntary request for bankruptcy."
Martin yesterday added on Twitter: "I made a voluntary confession in court. I want to collaborate with justice. I will face the consequences...I ask everyone for forgiveness. I am deeply sorry."
Last week Gotham City called the business "a charade", alleging that 90% of the company's revenues were non-existent, for example, and that it was managing fewer Wi-Fi spots than it claimed.
The firm's share price dropped about 60% in two days, following the publication of the report, from €19.91 to just €7.92.
Gowex, which makes money both from its B2B telecommunication unit and its free Wi-Fi platform, says it operates free Wi-Fi hotspots in 91 cities around the world.