The former CEOEpresident, Gerardo Díaz Ferrán. EFE

The former head of Spain’s largest employer group, Gerardo Díaz Ferrán, has been found guilty of deliberately driving the Viajes Marsans travel business he jointly owned with Gonzalo Pascual into the ground and was ordered to cover the debts of the company, which amount to over 400 million euros.

A Madrid commercial court also barred Díaz Ferrán, who chaired the Spanish Confederation of Business Organizations (CEOE) between 2007 and 2010, from managing the assets of third parties, or representing them for 15 years. The sentence also applies to Gonzalo Pascual, who is deceased. The inheritors of his estate will also be obliged to cover the hole on Marsans books that remains after the liquidation of the company. However, Pascual’s widow and his children have already renounced their right to their inheritance.

The court also found the associate of Díaz Ferrán, Ángel de Cabo, who took over Marsans in June 2010 at the time it was going into receivership, guilty of illegally stripping the travel business of its assets, including revenues from the sale of tickets. De Cabo was also barred from conducting business affairs with third parties for 15 years.

The Madrid court ruled that those convicted had committed a number of accounting irregularities in Marsans from 2009 in order to conceal the real situation of the company, stripping the company of its assets despite being aware of its state of insolvency and deliberately delayed calling in the receivers until June 2010.

Judge Ana María Gallego ruled that Marsans was already in the process of being wound down by Díaz Ferrán and his associates from the end of 2008. Although Díaz Ferrán entered negotiations with Marsans’ creditors, the company continued to strip the assets of an affiliate Teinver to the tune of 189 million euros, driving the group further into a bankrupt state.

Díaz Ferrán tried to blame the problems of Marsans on his deceased partner. However, the judge ruled that the two were equally guilty of the offenses they were charged with.

The judge had already embargoed assets held in the name of Díaz Ferrán and Pascual, including 10 properties, due to the likelihood of them being found guilty of illegal bankruptcy.

Díaz Ferrán is currently in preventive custody in connection with a criminal investigation into his business affairs known as Operation Cruiser. That case involves money laundering. Bail has been set at five million euros. De Cabo is also in preventive custody, with his bail set at 50 million euros.

Marsans receivers estimated the hole in Marsans books at 373 million euros, without taking into account other obligations. Marsans has 11,409 creditors. The judge’s ruling can be appealed with the Madrid regional High Court.

Marsans debtors include the tax agency the Social Security system and other public administrations that are owed over 30 million euros.