enormous debts accrued
Gerencia de Compras y Contratas S.L. owes 19 million euros but its assets have been frozen by the courts
07.03.09 - 13:34 -
CANTARRANAS. The company was based in this building.
Marbella Town Hall has applied for one of the many municipal firms created in the GIL era to enter administration. The firm in question is Gerencia de Compras y Contratas S.L., currently in the process of dissolution, which has accrued debts with private creditors and the tax office of 19.3 million euros.
The Malaga Mercantile Court must now decide whether to accept this “unusual” request from the local authority, explained the municipal finance coordinator, Carlos Rubio. He admitted that this was an “exceptional” measure taken in an attempt to resolve the enormous debts which the Town Hall cannot pay because the courts have frozen the company’s accounts. If accepted this would be one of the very few cases of a firm funded entirely with public monies going into administration in the whole of Spain.
The Town Hall has given three reasons for taking this step: firstly, the impossibility of paying off debts because the accounts are frozen; secondly because this would halt the costly court proceedings affecting the firm; and finally it would bring order to the numerous debts and invoices owed. Some of these unpaid invoices are already being investigated by the Government’s Auditing Tribunal as they are suspected of being fictitious - for services that were never provided - or inflated.
Rubio pointed out that this was a measure that would not be considered for other municipal companies. “Gerencia de Compras is different to the others. There have never been any employees which makes the administration process much simpler”, he explains.
The councils run by the GIL group created as many as 32 municipal companies over the years. These were used for siphoning funds from the municipal coffers and are tied up in a number of administrative and even criminal court proceedings.
The aim of Gerencia de Compras y Contratas in its day was to purchase goods and services without having to go through the normal procedure of awarding municipal contracts. After the Town Hall was dissolved in 2006 the interim committee stepped in and set up an official contracting unit.
The Town Hall has divided the company’s debts into those it considers to be genuine or suspect. The apparently genuine invoices add up to some 4.4 million euros, a sum that the authority had agreed to pay over a period of time. This has been complicated, however, with the company’s assets being frozen due to its involvement in the numerous court cases.
Now, if the Mercantile Court favours the Town Hall’s petition, it will be up to the administrators to decide which creditors will get paid, how much they will get, and when.
