Public Wi-Fi provider Gowex implodes as CEO takes responsibility for false accounting

by tech on July 7, 2014

The Spanish Wi-Fi provider Gowex has filed for bankruptcy protection, after admitting that it falsified its accounts for the last 4 years. CEO Jenaro García Martin has resigned.

All this follows a July 1 report by Gotham City Research, which said Gowex’s real revenues were 10 percent (or less) of what the company was reporting. What’s more, when Gowex claimed it had more than 100,000 hotspots in its free public Wi-Fi empire… actually it had around 5,000.

“90% of Telecom revenue originated from undisclosed related parties, tied to GOW CFO & an early investor,” Gotham wrote. “We have evidence Gowex’s largest customer was really itself.” The head of investor relations, who signed off on annual reports, was the CEO’s wife.

On Sunday Gowex announced that Martin was taking responsibility for the false accounting. Gotham responded by saying this was fortunate, “saving us all a great deal of time.”

I made the deposition and confession. I want to collaborate with the justice. I face the consecuencies.—
Jenaro Garcia (@jero_net) July 06, 2014

According to IT Pro, some local authorities in the U.K. whose free public Wi-Fi was being supplied by Gowex have said they will keep the services going.

I’ve asked the New York City Economic Development Corporation (NYCEDC) for a status update on its We2 partnership with Gowex. The company had also announced network rollouts in San Francisco, Buenos Aires, Paris and Madrid.

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