Grifols ( GRFS ) SA shares are down on Wednesday following the publication of a new report by Gotham City Research questioning the company’s “transparency, integrity and ethical conduct.”

Grifols ( GRFS ) had previously denied Gotham City’s accusations, as per its February SEC filing, saying it had already replied to all of the questions raised in the latter’s reports.

Grifols ( GRFS ) claimed in its public February 20 response that the company had addressed all our questions, yet new information from the Kepler note suggests otherwise, the report added. 

According to the Kepler note, Grifols ( GRFS ) claims that €321 million (the Grifols ( GRFS ) 2022 financial statements indicate €319 million) of “other financial assets with related parties” refers to a “cash pooling financing arrangement” that Haema and BPC have with Scranton, but Gotham City says it is lending activity between Haema/BPC and Scranton.

Gotham said Grifols’ representation of the lending activity was “neither detailed nor correctly identifies the nature of the transactions.”

Gotham states, “On the one hand, Grifols ( GRFS ) publicly claimed (for all to see) that they have answered all our questions we asked on February 20; on the other hand, it appears that Grifols ( GRFS ) answered some of our questions by selectively disclosing new information to select analysts that same week, after the company had claimed that it had previously answered all our questions.”

In January, Gotham City Research released a short report on Grifols ( GRFS ) alleging that it manipulated its accounts to lower its leverage artificially.

The report alleges that Grifols ( GRFS ) included satellite companies’ earnings in its accounts but excluded their debts, distorting its actual leverage ratio. 

The European Central Bank initiated inquiries into several lenders, urging them to disclose their exposure to Grifols ( GRFS ) and its affiliated entities following accusations of financial manipulation.

In January, Grifols ( GRFS ) filed a lawsuit in a United States court against Daniel Yu, Gotham City Research’s founder, and his companies for the financial and reputational damages.

Price Action: GRFS shares are down 12.15 at $5.43 on the last check Wednesday.