Indra’s crisis has exposed the State’s interest in the company these past weeks, so that it is now more closely linked to the defense industry. The SEPI (State Society of Industrial Participations), together with large shareholders, asserted 25% of its shares in the group to force a change of direction. However, the shares plummeted almost 15% after the board changed.
A series of events has led to another resignation on Tuesday. Another resignation from the council. This is Ignacio Martin. Martin will be leaving his seat in October after the renewal process for the management body members is complete. This announcement is made after the Government, via SEPI, has completed its takeover.
The confrontation with independent directors was revealed at the shareholders’ meeting, as well as the Executive’s determination to do this at all cost. It joined forces with Amber Capital, a Basque investment fund, and Sapa to remove several independent directors and include Jokin Aperribay, president of the Royal Society, and member of Sapa’s family, into the governing body. This would balance the power structure that existed up until then.
All these movements have their economic roots in the desire of the State –in this instance Moncloa – and the shareholders to increase Indra’s commitment to the defense industry, and to invest in ITP, the capital of the Basque firm, which will be sold by current owners Rolls Royce. This is even more true when you consider the necessity to increase military budgets. That’s what NATO leaders are addressing at their summit in Madrid.
Enrique Leyva (the independent vice president of the company), said that “if your wish is to bend us arms, don’t count on me” during a speech given at the meeting. After it became apparent that the Government, Sapa and the Amber investment fund had reached an agreement to restructure the board of directors, he did so. Just minutes before, Alberto Terol (an independent director) made harsh allegations against SEPI’s takeover of the company. He had announced his resignation from Sapa days earlier. Last week, Ana de Pro and Carmen Aquerreta, the counselors, also left.
To achieve its goal, the Executive used a formula to force the mass dismissal of independent directors. It was possible with several agreements. Amber Capital is the largest shareholder in the Prisa group and broke into the technology company’s shareholding with 4.1%. It made Joseph Oughourlian the president of the communication group and the fourth-largest shareholder of the technology company a week before the shareholders’ meeting.
Because it is a direct attack against corporate governance regulations, the operation could have adverse consequences for international investment funds’ valuation. The State intervened to question the company’s governance. On Tuesday, its shares rose by 1%.
The conflict is not from within. Indra was long wanted by the Executive to be taken over by the State for its defense interests. The decision by SEPI to block Marc Murtra from assuming executive power was one of the many differences between the Government and independent directors. The opposition was also allowed to enter ITP’s capital, even though 75% of it will be owned by Bain. However, another 30% could be assigned.
This whole process was best understood in the May 2021 month. After the departure of one director from the board, a civil war broke out between SEPI’s independent directors and the public entity in Indra. This was because the public entity wanted to create a “new stage” within Indra.
These movements have been criticized by the PP, which bases its censorship upon the National Securities Market Commission’s (CNMV) position. CNMV has not always welcomed the events at Indra. Rodrigo Buenaventura (the president of the market regulator) described Friday’s decision by SEPI and its allies to fire five independent advisors from the technology company, and therefore favored the control of that company by the public-holding company.
Evidently, the version presented by the company’s leadership is on the opposite side of the spectrum. Marc Murtra, the chairman of the company, was appointed in May 2021 during the crisis between independent directors and SEPI. He stated last week that the increased representation of SEPI in Indra’s capital is only a response to what is already happening in Europe, particularly in the technology sector.
Murtra, until now without any effective power, but who, after the changes and appointments made by the shareholders’ meeting last week, has it, boasted in an interview in El Pais this Monday about the improvements in the company’s financial position in the past year. He also maintained that the company would be managed “without interference or suggestions” using technical and professional criteria.
Indra’s fourth largest shareholder, Joseph Oughourlian of the Prisa Group, was irrupted. This is interpreted by SEPI as a support for strengthening its control of the company after SAPA entered it. According to reports to the CNMV, Oughourlian channeled his investment through Amber Capital, and now owns 7,384,790 shares. At current market prices (10.21 euro per share), his stake is worth 75.69 million Euros.