Consumer group to call for Nueva Rumasa fraud probe

Facua-Consumers in Action was set Monday to ask the public prosecutor to investigate if any of the companies in the Nueva Rumasa conglomerate had committed fraud in issuing promissory notes to the public supposedly for the imminent acquisition of other firms.

Nueva Rumasa last week initiated talks with its creditors in an attempt to avoid having to call in the receivers. The founder of the group, José María Ruiz-Mateos, previously oversaw a business empire called Rumasa, which was expropriated in 1983 by the government after auditors found a massive hole in its balance sheet.

The consumer protection group will specifically ask the public prosecutor's office in Badajoz to probe notes issued in 2009 by Nueva Rumasa unit Carnes y Conservas Españoles (Carcesa), the proceeds from which were used to cancel loans and to lend money to other companies in the group.

The documentation published in February 2009 by Carcesa inviting investors to buy the notes being issued said: "The funds obtained from the issue of promissory notes will be used in the acquisition of companies. The purchase of a number of companies affording real business opportunities is being studied."

Carcesa took in a little over 70 million euros from the issue of the notes, which guaranteed an annual interest rate of 8 percent. It bought only one company, valued at 1.7 million euros, during 2009.