The Supreme Court has agreed to admit Telepizza’s appeal against the sentence of March 18, issued by the Contentious Chamber of the National Court, in which it condemned the restaurant chain to pay a fine of 150,000 euros for having miscommunicated the market the resignation of Marcos de Quinto to continue on the board of directors, an event that took place on May 18, 2018. Then, Telepizza referred to “personal reasons”, to justify the departure of the businessman, when in De Quinto had actually disagreed because he did not share Telepizza’s project of signing a pact with Pizza Hut (now Yum!) to become a franchise master in Spain and Latin America.
The CNMV opened a file for that event and ended up sanctioning the company for a serious infraction typified in article 295.15 of the Securities Market Law for failing to comply with the rules on market abuse. The CNMV always maintained that Telepizza had provided information with inaccurate or untrue data, and that it omitted relevant aspects or data to explain what happened. In fact, the judgment of the Hearing that endorsed the sanction reached the conclusion that the resignation had a personal motivation, but that it was given by the reluctance of Marcos de Quinto, against the majority of the board of directors, to endorse the operation. Something that was “transcendent and concrete enough” to have influenced, if it had been communicated correctly, the decision-making of investors and the prices of the securities.
The company, however, alleges that it complied with the recommendations of the Good Governance Code of the supervisory body in force at that time, which contemplated the communication of the director’s dismissal as a relevant event, “but not the reasons for the dismissal,” according to the appeal. admitted for processing. The Supreme Court now intends to interpret the regulations on market abuse and the Securities Market Law to make a decision.
After that agreement with Pizza Hut, which was very well received by the market, Telepizza aspired to create a giant in Latin America, the Caribbean, Switzerland and Spain, with plans to make 1,300 new openings in 10 years. However, last year, the company threatened to break the pact due to the “inability” to integrate both brands efficiently because the COVID depressed sales and triggered the group’s financing needs. After a year on the tightrope, the terms of the agreement were revised and Food Delivery Brands (Telepizza), owned by KKR, secured new financing. According to what they announced last May, Telepizza and Pizza Hut (Yum!) Have extended the deadline for those 1,300 openings by one year, and have revised the geographical distribution of the openings. Telepizza reported losses of 12 million euros in the first quarter of this year.