The Council of Ministers agreed to the rescue of the airline Plus Ultra in March 2021 for an amount of 53 million euros, considering it a “strategic” company. That rescue could have been carried out outside the law. The judge of the National Court José Luis Calama believes that the airline did not meet the requirements established in European regulations to be rescued.
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In the order by which the former president of the government José Luis Rodríguez Zapatero is ordered to testify on June 2 as an investigated party, the investigating judge reviews the details of the aforementioned rescue. The European regulations in this matter, temporarily applicable during the coronavirus pandemic, expressly and strictly prohibited rescuing companies that were already in technical bankruptcy before December 31, 2019.
For the magistrate, all indications point to Plus Ultra already being in a “crisis situation” on the date set by European law, as it had already been in a state of dissolution and insolvency for a year, which legally should have prevented the rescue.
The Court of Instruction number 15 of Madrid, which was in charge of investigating this matter before it reached the National Court, commissioned an expert report on the economic situation of Plus Ultra at the time the rescue was granted. “In this report, prepared by the expert Pedro Martín Molina, as a final conclusion, it is stated that the company Plus Ultra did not comply” with the legal requirements to be rescued.
The content of that expert report “raises more than reasonable doubts about what the company’s asset situation would have been on that date, December 31, 2019, and consequently, about the fulfillment of the essential conditions for granting public aid,” indicates the judge’s order.
The magistrate adds that “thus, although the aid was justified by claiming that the company was strategic and was not in crisis before the pandemic, the expert analysis determined that it had already been in a state of dissolution for a year, with insolvency and insufficient liquidity to operate.”
Furthermore, the judge questions the reports presented by SEPI, the entity through which the rescue was articulated, as “they were drafted to justify the granting of the rescue, despite Deloitte [the auditor who prepared the expert report] pointing out doubts about the airline’s ability to continue operating and warning of serious cash problems.”
The judge also sees indications that Plus Ultra doctored its accounts to obtain the coveted 53 million rescue: “To prevent the accounts from showing losses that would require dissolution, the company would have resorted to various accounting tools, an alleged participative loan from the Panamanian group Panacorp – which actually required immobilizing funds in a Dominican bank -, adjusted provisions, and a bondholder swap through the seizure of an airplane.”
The magistrate concludes that “all this allowed the asset situation to be doctored and prevented equity from appearing negative.”
This morning, the auditor of Plus Ultra’s accounts, Jesús Ángel Carbajo, who approved the airline’s financial statements, appeared before the Senate commission investigating the alleged irregularities of Pedro Sánchez’s government. Carbajo was subjected to a tough interrogation by the PP senator Salvador de Foronda, who insisted, with accounts in hand, that the rescue was illegal because Plus Ultra “was already in a state of dissolution in 2019.”
Carbajo defended himself by stating that the expert report mentioned by Judge Calama in his order and the audits he conducted “are totally different things.” “I have not seen the expert report. Audits are very structured and we have to look at very specific aspects,” said Carbajo, who explained that he did not include qualifications in his audit report “because we did not detect irregularities.”
“As an auditor, I did not get involved in SEPI’s matters,” added Carbajo. He also did not investigate the shareholders: “I don’t know who is behind those companies. I look at the invoice and see if it is paid. I don’t analyze who owns it. My duty is to check that it is accounted for.” And he did not assess whether the rescue money was used to pay debts and company expenses.
The judge believes that yes, the 53 million of public money obtained by Plus Ultra ended up “in companies that were not part of the airline’s normal operations, with significant transfers to companies that did not appear in previous years and had no direct relationship with Plus Ultra’s activity.”
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