Free Wi-Fi provider Gowex goes belly up after cooking the books

The Spanish company's CEO Jenaro Garcia Martin comes clean about inflating revenue -- "I am sorry with all of my heart," he says.

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Gowex CEO Jenaro García stepped down after admitting to falsifying company accounts. Gowex

In a matter of days, free Wi-Fi provider Gowex has gone from a multimillion-dollar publicly traded company to bankrupt.

The company's CEO and president, Jenaro Garcia Martin, admitted Sunday to inflating Gowex's revenue over the last four years and has stepped down from leadership as the company files for bankruptcy protection.

Gowex's board "has revoked all powers and delegations granted to the chief executive officer and has accepted his resignation," the company wrote in a statement on Sunday. "The board, anticipating that the company might not be in a position to face its ongoing debts when they become due, has agreed to file for a declaration of voluntary insolvency."

The Spanish-based Wi-Fi service, which claimed to provide free wireless in 91 cities around the world, said it partnered with telecommunications bigwigs like AT&T, T-Mobile, Skype, and Cisco. Gowex said it made a lot of its money from those partnerships via data use from hotspots and advertising. In 2010, the company went public and saw its stock value go from about $2 in 2012 to nearly $36 earlier this year.

The takedown of Gowex began with a report by Gotham City Research on July 1, which alleged that 90 percent was the company's revenue basically didn't exist, according to The Wall Street Journal. The days following Gotham City's accusations, Gowex adamantly denied any wrongdoing (PDF). However, by Sunday, it appears Garcia knew that he'd been had and took to Twitter to come clean.

"I ask forgiveness from everyone," he tweeted in Spanish. In a second tweet, he wrote, "I made the deposition and confession. I want to collaborate with the justice. I face the consecuencies [sic]."

 

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