The week that convulsed the technology company

The president of Indra, Marc Murtra, at the meeting last Thursday. / EFE

The unexpected changes in Indra's board have given the company a new direction to try to link it to the defense business

Jose Maria Waiter

The crisis generated within Indra has revealed the interest that the State has had in recent weeks so that the company is more linked to the defense business. For this, the SEPI (State Society of Industrial Participations) has asserted the 25% of shares it has in the group to give a change of direction together with several large shareholders at the meeting last Thursday. But with the change in the board of directors, its shares responded by plummeting almost 15%.

The trail of events has led to another resignation this Tuesday. One more defection from the council. That of Ignacio Martín, who will leave his seat in October, once the renewal process of the members of the management body is completed. The announcement comes after SEPI consummated its takeover of the company last Thursday, at a shareholders' meeting that revealed the confrontation with the independent directors and the desire to do so at all costs. To do this, it allied itself with the investment fund Amber Capital and the Basque company Sapa, to dismiss several independent directors, incorporate Jokin Aperribay -president of the Royal Society and member of the family that owns Sapa- into the governing body and unbalance thus the scheme of power that existed until that moment.

The blockade on Indra's board aggravates its corporate crisis

The economic background of all these movements is found in the desire of the State, and of the shareholders with which it allied itself, to expand Indra's dedication to the defense industry and in particular to enter the capital of the Basque company ITP, which it is going to be sold by its current owners Rolls Royce. Even more so in a context of the need to increase military budgets, just as NATO leaders are dealing with these days at the Madrid Summit.

"If your wish is to bend our arms, don't count on me," said the company's vice president, the independent Enrique Leyva, in a speech at the meeting, after it became clear that there is an agreement between the Government, the investment fund Amber and Sapa to reshuffle the board of directors. Minutes before, another independent director, Alberto Terol, who had already announced days ago the decision to resign from him, launched harsh accusations against Sepi's takeover of the company. The counselors Carmen Aquerreta and Ana de Pro also left last week.

The formula used by the Executive to meet its objective was to force the massive dismissal of independent directors. He achieved it with various agreements, including that of Amber Capital, which is the largest shareholder of the Prisa Group, which broke into the shareholding of the technology company with 4.1% of the capital, which made him the president of the group of communication, Joseph Oughourlian, immediately, in the fourth largest shareholder of the company one week before the meeting of shareholders of the technology company.

The operation may have negative consequences around the valuation made by international investment funds because it represents a direct attack on corporate governance rules. In other words, the very governance of the company has been called into question with the intervention led by the State itself. Its shares rose 1% this Tuesday.

But the conflict comes from afar. The Executive had long sought a takeover of Indra, to put this listed company at the service of the interests of the State in defense matters. Among the numerous disagreements between the independent directors and the Government was the decision to prevent the president, Marc Murtra, who was appointed by SEPI, from having executive powers. Also the opposition to enter the capital of ITP, since although 75% will belong to Bain, it was free to assign another 30%.

The month of May 2021 was already crucial to understand the process. Then a war broke out between SEPI and the independent directors after the departure of one of them from the board of directors due to the intention of the public entity to start a "new stage" in Indra.

The accusations of the PP are based on the position of the National Securities Market Commission (CNMV), which has not received these movements in Indra with applause either. Moreover, the president of the National Securities Market Commission (CNMV), Rodrigo Buenaventura, described last Friday as "striking" and "worrying" the decision of SEPI and its allies to dismiss five of the eight independent directors of Indra and thus favor control of the company by the public holding company.

The version of the leadership of the company, obviously, is at the opposite end of the spectrum. The president, Marc Murtra, appointed in May 2021 when the crisis between the independent directors and SEPI germinated, stated last week that the increase in SEPI's representation in Indra's capital only responds to what is already taking place in Europe, especially in the technology and defense sector: "It is obvious that all countries want to have the greatest participation of their companies in the areas of greatest added value, such as systems", the president emphasized last week .

Murtra, who until now had no effective power but who after the changes and appointments adopted by the shareholders' meeting last Thursday has now had it, boasted this Monday in an interview in 'El País' about the improvement in the financial situation of the company in the last year while maintaining that the company will be governed "by technical and professional criteria without interference or suggestions".

The president of the Prisa group, Joseph Oughourlian, has broken into Indra's shareholding with 4.1% of the capital, which immediately makes him the company's fourth largest shareholder one week before the shareholders' meeting of the technological. The movement is interpreted as a support to reinforce the control of the Spanish Society of Industrial Participations (SEPI) over the company, after SAPA entered the company. Oughourlian has channeled his investment through the fund manager Amber Capital and has 7,384,790 shares of the firm, as transmitted this Thursday to the National Securities Market Commission (CNMV). This participation is valued at current market prices ( 10.21 euros per share) to 75.69 million euros.

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