SUMMARY OF THE CRIMINAL LAWSUIT AGAINST
GOLF CLUB VALDERRAMA AND ITS DIRECTORS
Mr. Ramón Dávila Guerrero and Mrs. Denisse Ortiz Patiño, in their condition as former members of Golf Club Valderrama (hereinafter, “GCV” or the “Club”), and shareholders of Valderrama, S.A. (hereinafter, “VALSA”).
· Mr. JR General Manager of GCV.
· Mr. NAB President of GCV.
· Mr. JCG Vice president of GCV.
· Mr. PySecretary of the Board of Governors of GCV.
· Mr. BP member of the Board of Governors of GCV.
3.- ALLEGED FACTS
VALSA is the owner of a golf course which is currently rented to GCV for its exploitation. For the purposes of regulating this rent and some other aspects of the relationships among the companies of group Valderrama, on 3 November 2005, VALSA, CGV and Valderrama Investments, S.A. entered into a framework agreement (hereinafter, the “Framework Agreement”) by virtue of which, the following terms, among others, were agreed:
1. Any person who wishes to become a member of GCV should acquire a share class B in VALSA.
2. The price for the acquisition of shares class B in VALSA shall be fixed by GCV, in agreement with VALSA and in view of certain parameters. In any case, the vendor shall be entitled to receive 75% of the price, while the remaining 25% shall be allocated to GCV.
3. On the other hand, those members of GCV who wish to leave the Club should also sell their shares class B in VALSA through the brokerage of the Club.
Despite the abovementioned agreements, GCV has carried out some performances which may be against the law.
Firstly, GCV has imposed a share price which is not consistent with the Framework Agreement and prejudices the vendors of shares class B for the benefit of GCV. In particular, GCV is imposing a purchase price of 10,000 Euros in favor of the vendors, while the Framework Agreement set forth an estimated amount of 112,500 Euros. Furthermore, the Club is receiving a much higher amount as a contribution for the acquisition of shares class B and the entry of new members. This is against the Framework Agreement, since firstly the price is not being calculated in accordance with the agreed parameters, but at the own discretion of GCV, and secondly the Club is receiving a percentage of the price exceeding the one set forth in the Framework Agreement in prejudice of the vendors.
By way of example, note that in 2017 GCV estimated that the membership of GCV amounted to 200,000 Euros, of which 150,000 Euros were the value of the share. Despite this, GCV is compelling the shareholders to sell their shares for a purchase price of 10,000 Euros.
This situation has provoked that 60 former members of GCV have not sold their shares class B since they do not agree with the price proposed by the Club.
On the other hand, GCV has allowed the entry of 51 new members who do not hold any shares class B in VALSA. This is against the framework agreement and GCV’s bylaws, but it also prejudices the value of shares class B, since it seems that the acquisition of these shares has become unnecessary to benefit from the membership of GCV.
This situation provoked that VALSA finally filled an arbitration request before the Arbitration Court of the International Chamber of Commerce of Paris.
However, in 2017 GCV acquired shares class A, C and D of VALSA, taking from that moment control of the company. Thus, the board of directors of VALSA was removed and the directors of GCV were appointed as new directors of the company. Once GCV had control in VALSA, its directors agreed to terminate the arbitration process, provoking complete distress for holders of shares class B.
The facts described above may constitute the following criminal offences:
1. Imposition of abusive agreements in prejudice of minor shareholders (article 291 of the Spanish Criminal Code).
2. Impediments to the information rights of shareholders or to their participation in the management of the company or the exercise of their preferential rights (article 293 of the Spanish Criminal Code).
3. Disloyal administration (article 295 of the Spanish Criminal Code).
4. Price manipulation (article 284 of the Spanish Criminal Code).
RESOLUTION OF THE CRIMINAL COURT
The Court of Criminal instruction number 2 of San Roque (Cádiz) has admitted the criminal complaint ( disloyal administration) against the president, Vice president, Director General and two directors, including one of them who is mentioned in the United Nations report about corruption in the oil food Program in Iraq .
The judge has agreed to the statement of the directors investigated in the 11 th of nextcoming May.