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Sherry firm hit by administration and fraud claims
The Nueva Rumasa group, which includes Sherry brands Garvey and Valdivia, has gone into administration, with the loss of 37 jobs and a criminal fraud investigation launched against its owners, the Ruíz-Mateos family.
The collapse has also seen most of the remaining staff take a 20% pay cut with reduced hours, while there has been a further knock on effect for the 10,000 employees of the Nueva Rumasa group.
A source close to Jerez confirmed that “the Ruíz-Mateos family have been removed from management”, with all payment and supply contracts to be conducted through the administrators.
The focus is understood to be on paying off Nueva Rumasa’s current debts, with the aim of keeping the business going, while outstanding payments are understood to be “under negotiation”.
The source assured the drinks business that the four bodegas within the group, Garvey, Valdivia, Zoilo Ruiz-Mateos and Teresa Rivero, “continue to operate on a normal basis.”
Among the family members understood to be involved in the fraud investigation is Alfonso Ruíz-Mateos, husband of the British honorary consul Alejandra Cruz-Conde Lleo.
Ten companies within the Nueva Rumasa group entered bankruptcy protection in February, a move which allowed it four months to negotiate a payment plan with creditors.
At the time, the head of the family, José María Ruíz-Mateos, revealed that the combined debt of the companies amounted to €700 million, assuring employees and investors that “no lay-offs are planned”.
In March both Ruíz-Mateos and his son were summoned to court for questioning as part of an investigation into alleged fiscal fraud at the Rayo Vallecano football club, which the family owns in addition to its interests in the hotel and dairy industries.
Only last year, Garvey was defending its role as whistle blower in a Sherry cartel scandal, with its then regional manager Tim Holt claiming that new regulations on production were “trying to squeeze us out in favour of Fedejerez bodegas.” Holt has since moved to become area director at Bodegas Barbadillo.
Gabriel Savage, 14.06.2011