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Spanish frozen fish giant Pescanova deliberately fabricated deals and financial results to hide a 3.2-billion-euro ($4.3 billion) debt, a damning auditors' report revealed Wednesday.
The true level of debt, uncovered by accountants KPMG was more than double that previously declared. Previously, an audit showed that Pescanova was saddled with 1.5 billion euros of debt.
The audit found that Pescanova obtained credits for invented deals in which no goods were actually involved.
It also used corporate structures designed to generate "fictitious" earnings, the KPMG report said.
"In the last financial periods, practices were designed and set up whose object was to present a group financial debt smaller than the reality and, as a consequence, results that were larger than those actually generated," stated the report.
The manoeuvres "may be considered irregular from an accounting and financial viewpoint", it added.
Pescanova filed for bankruptcy in April and is being investigated by the Spanish courts.
The fishy accounting moves were no mistake, the report said.
"They were the result of conscious planning carried out over several years by the Pescanova management," it said.
"There is well-founded evidence that certain people in top management instructed, executed, carried out or knew, to a greater or lesser extent, of the said practices."
Accounting firm Deloitte, which is acting as Pescanova's administrator, called a meeting of the Pescanova board for a briefing, a source close to the matter said.
The Spanish courts opened an investigation on May 23 into several top managers of Pescanova including itsÂ president, Manuel Fernandez de Sousa, on suspicion of falsifying accounts and insider trading. Fernandez de Sousa denies any wrongdoing.
Pescanova, based in the northwestern coastal region of Galicia, has not published its 2012 results, which are being audited.
The fishing company has 160 branches around the world and a fleet of more than 100 vessels.
Pescanova sells its fish products under 16 brands and employs about 10,000 people.