Spanish wireless networks provider Gowex filed for bankruptcy yesterday, a week after an accounting fraud at the firm was revealed, while the Spanish High Court said its founder could face a jail sentence of more than 10 years, Reuters reported yesterday. Law firm Velez & Urbina said Gowex had decided to file for bankruptcy because it was in a state of "imminent insolvency" and faced a "financial standstill" after a high number of contracts were ended and new projects were cancelled. Former Chief Executive and Chairman Jenaro Garcia Martin said on July 6 that he had misrepresented the financial accounts for at least the last four years. Last week he was charged with false accounting, distortion of economic and financial information, and insider trading.
