The President of the Government, Pedro Sánchez, has indicated that the State Society of Industrial Participations (SEPI), main shareholder of Indra with 28% of the capital, is collaborating closely with the technology and defense company to channel the “alleged conflict of interest problem” arisen around the operation with Escribano Mechanical & Engineering (EM&E).
“That is an issue that has to do with an alleged conflict of interest problem and it is SEPI who is working at Indra on this matter,” Sánchez indicated in statements to the media upon his arrival at the European Council, thus referring to the role of the public holding company in managing this situation.
Merger Indra with EM&E
The origin of the controversy lies in the merger proposal promoted by Indra itself with EM&E, a firm of which the current president of the technology company is co-owner, Ángel Escribano, and which, furthermore, appears as Indra's second largest shareholder. This overlap of interests has led SEPI to intervene before the analysis of the operation is completed.
In a relevant information communication sent last night to the National Securities Market Commission (CNMV) by the president of SEPI, Belén Gualda, it is detailed that the state holding company has sent Indra a letter regarding the operation that the defense company is studying with EM&E, which owns 14.3% of Indra's capital.
In that letter, SEPI conveys to the company its “concern” due to the weight that the conflict of interest would be having in the evaluation of the operation, despite the mitigation measures already adopted by the company.
SEPI underlines that “a possible operation with EM&E “should not be conceived as an instrument to resolve the conflict of interest, nor should it be influenced by it; on the contrary, this conflict should be cleared before undertaking the analysis of the operation”.
“For said reason, SEPI has requested that this conflict be resolved in order to be able to continue the analysis of the operation and adopt a decision on it that is most advantageous for Indra”, concludes the note signed by Gualda and sent to the stock market supervisor.
Montero insists that the conflict was not detected at the beginning
The First Vice President and Minister of Finance, María Jesús Montero, has defended that this conflict of interest “was not at the origin, from the part we knew about,” in reference to the moment in which the Government gave the green light to the appointment of Ángel Escribano as president of Indra.
“The decision that SEPI makes is that there is a conflict of interest and it cannot be done (the operation) under these conditions,” Montero has indicated, who considers that it will be Indra's board of directors that must propose the solution to the problem. “We are nothing more than part of the company,” he added on the RTVE and EFE program ‘Los Desayunos’.
The head of the Treasury has recalled that SEPI is organically attached to her ministry, although she has avoided going into details about the next steps. “I don't want to give more details, because it seems to me that one must be very prudent, because it is a listed company, but I do want to tell you that, of course, Indra is a strategic company, that we are going to bet very strongly on it and that all operations that it carries out in the future must be carried out without a conflict of interest arising, this and any other in the future,” she has stated.
Regarding a possible departure of Escribano from the company, Montero has limited himself to pointing out that “there are solutions that are on the table and they will have to be explored”.
In any case, he has remarked that Indra “is called to play a leading role in defense and security in Spain and in Europe as a whole”, thus reinforcing the strategic nature of the company in the current European context.