Solutions 30 was once a little known name on the French stock market. On the surface the outsourcer was a mundane man-in-a-van operator providing last-mile services by name. European corporate giants such as EDF, Vodafone and Unitymedia.
Until December, his actions had been on a race ship. Since the listing in 2005, they had raised a whopping 21,000 percent, giving the company an estimated $ 2.1 billion, and making its executive director and co-founder – an Italian Gianbeppi Fortis, educated at Insead, worth close. to 350 million euros.
The story unfolded quickly afterwards.
The trouble starts when one brief anonymous report shut down the French press just before Christmas 2020. Short-selling activist Muddy Waters, who had been short on the stock market since May 2019, followed with a series of open letters to Fortis. In April, an independent audit was commissioned by Solutions 30 by Didier Kling & Associates and Deloitte found and several accusations by “unfounded and erroneous” short sellers.
Following last year, Solutions 30 revealed that its auditor, EY, had refused to sign on their accounts throughout the year. The news follows a two-week suspension of trade in the actions of society, a move which had been self-initiated. Alongside the unaudited results released by the company on Sunday, EY said the company “did not provide us with access to certain information necessary to perform our audit” and that it had:
. . . has not been able to obtain sufficient and appropriate evidence supporting the nature, substance, value and compliance with the laws and regulations of certain group transactions and to determine whether such transactions were made with related parties, including with members of the management.
He went on to say that “the possible effects on the consolidated financial statements of undetected errors may be both material and widespread.”
Solutions 30 said it “strongly disagreed” with EY’s reasoning, adding that the Big Four company had not rejected or qualified the accounts. Investors usually expect an unqualified audit report from a large listed company, confirming that the accounts were accurate and could be relied upon.
On Monday morning, the stock fell by more than two-thirds. The market capitalization of the company is currently 300 million euros.
EY’s statement highlighted the issues of connected parties since the last financial year of Solutions 30.
But FT Alphaville also studied the links between a Solutions 30 provider and entities linked to the company’s senior management, including Gianbeppi Fortis, between 2013 and 2014. In this post, we plan to share what we’ve learned so far. .
This story begins in North Africa, with a company called FNT International.
From Tunisia. . .
According to the local register of Tunisian companies, FNT International – of which the general manager of Solutions 30 Gianbeppi Fortis was once a 99.5% shareholder – was founded by an Italian Federico Niccoli in February 2012.
She was registered in a single office space in an undisclosed commercial block in central Tunis, not far from Juventus ’local football academy.
But these aren’t the only office links in Solutions 30. Since then 2013, the Tunisian subsidiary of the company, Telima Tunisie, also called the same address at home, alongside an accounting firm called Audasco, according to on their website. Audasco did not respond to a request for comment.
The founding director of FNT, Federico Niccoli, could not be reached for comment.
What we do know is that, according to a daily warning in Tunis Time and local presentations, three months after the founding of FNT, in May 2012, Niccoli sold most of his stake in Fortis and also a small stake (0.5 percent) to a woman named Maria Creti, the wife of the brother of Fortis Ruggero. Ruggero was the chief executive of the Italian business of Solutions 30 since 2008.
Two and a half years later, in December 2014, Fortis and Creti sold their stake to an Italian named Giuseppe Nicolosi, according to local documents. Nicolosi then transferred his majority stake in a so-called Cypriot entity Nabitek Ltd..
. . . in Romania. . .
Giuseppe Nicolosi is a call center operator whose activities have served as an outsourcer for Solutions 30 for almost a decade. His name can be found in the registers of various companies both in Romania and in Italy, and he was once a shareholder of the former subsidiary Solutions 30 in Eastern Europe.
It is clear that Nicolosi was friendly with the management of Solutions 30. His Twitter account he posted a photo with himself and Ruggero Fortis returns in late November 2014, a few weeks before taking control of FNT International.
At the time, Nicolosi ran a company in Romania called Gainglobal, which had been providing outsourcing services for Solutions 30 Italia since September 2013, according to a contract seen by FT Alphaville.
On the surface, it wasn’t an unusual relationship: Solutions 30 has long outsourced some of its back-office operations to Eastern Europe. What was different for Gainglobal, however, was that he had a direct business relationship with Gianbeppi Fortis ’FNT International.
A one-year agreement seen by FT Alphaville, signed on January 3, 2014, details that FNT was to provide direct line services to Gainglobal for a total contract value of more than € 100,000.
If this story becomes confusing, let’s take a step back. Here’s what we’ve explained so far.
The Italian subsidiary of Solutions 30 has contracted a Romanian company, managed by a close affiliate, which has therefore contracted a Tunisian company owned by the executive director of Solutions 30 and his sister-in-law. The Tunisian business, FNT International, was later transferred to the owner of the same Romanian company almost exactly a year later.
Local FNT sources say it was created to export technical support, so it might have been able to provide these services to Gainglobal. However, outside of company documents, it does not appear to be online tracking of the company, whether in the form of employees, suppliers or customers.
In mid-January 2014, just one week after the start of the contract, Gainglobal transferred 225,050 Romanian lei – or € 50,000 – to FNT at the request of an invoice, according to documents seen by FT Alphaville.
It was not the only payment that FNT International received in 2014. According to other documentation, from June to December 2014 it received just under € 575,000 in number in a series of transfers. Of this money, almost a tenth comes from the Tunisian subsidiary of Solutions 30, Telima Tunisie. After each transfer took place, an almost identical amount was transferred several business days later.
It is not clear where FNT International transferred the money.
Nicolosi did not respond to a request for comment.
. . . on the shores of Mauritius
FNT International, however, is not the only business of Gianbeppi Fortis, the executive director of Solutions 30, who described his interests.
Since at least January 2013, Fortis has been the director and owner of a Mauritian investment trust called Piscon International, according to u local business register and people familiar with the subject. The business is now gone.
The trust was registered at the Mauritius office of the Swiss trust company Trident Trust, on the front of the African island’s capital, Port Louis. Trident Trust declined to comment.
Like FNT International, Piscon may also have had a business relationship with Gainglobal. Under a contract seen by FT Alphaville, Piscon was to provide direct line services to Gainglobal for a period of one year starting January 3, 2014, at a fixed cost per ticket.
You may note that the contract shares the same start date as the agreement between FNT International and Gainglobal.
It is unclear whether the contract was executed or whether any payment was made by Gainglobal to Piscon during 2014.
Fortis ’engagement with FNT and Piscon leaves open the question of why they were not disclosed to shareholders. Especially when in Solutions 30’s 2014 annual report, the directors of the executive director, including one in his own private investment vehicle Federol, are listed:
In a statement, Solutions 30 said:
The company has already indicated that it will no longer respond to allegations made in the public arena. It repeats that it complies with all disclosure requirements in accordance with applicable regulations. The company also reserves the right to take legal action against any material that is newly taken out of context.
Gerry Brown, a corporate governance expert, told FT Alphaville that “any business interests of the executive director must be disclosed to the board of directors” and that such disclosures will generally be part of the executive director’s contract with the company. Although it was not a contractual requirement, he added, that the best approach “is to be transparent and to disclose the entity.”
Benedikt Timmerman, a former Fortis Insead classmate who was a board member at Solutions 30 between 2007 and 2013, said he was “very surprised” by recent allegations against the company that he was “managing” very professionally with impeccable ethical standards ”during his stint on business. Timmerman made his comments to FT Alphaville ahead of the events of the last fortnight.
I couldn’t remember if Fortis ’interests in FNT International and Piscon International had been divulged to the council.
Timmerman added, however:
I think it is appropriate that everything be clarified, and that every fault be investigated properly. And I would expect him to know Gianbeppi Fortis. All links, except those that are explicitly personal, must be clarified by the company.
Solutions 30: a question mark € 1.1 billion – FT Alphaville
Solution 30 and the control letter disappears – FT Alphaville
Solution 30 stock craters after EY refused to sign on to the accounts – FT Alphaville
Solutions 30: suspended in animation – FT Alphaville
Oddo requires an independent audit in Solutions 30 – FT Alphaville
Solutions 30 suspends action after Muddy Waters joins the fight – FT Alphaville
Solutions 30 falls a fifth on the news of a brief unreleased report – FT Alphaville