The Board of Directors of the SGAE terminates the position of its Managing Director, Luis Felipe Palacios 12/Mar/2018

The Board of Directors of the General Society of Authors and Publishers (SGAE), who met today in an extraordinary session, has decided to withdraw its confidence in the Managing Director, Luis Felipe Palacios, who has provided his services to the entity since January 2013, principally as Economic and Financial Director and, during the last year, as Managing Director.

As established by the entity's governing charter, the senior management voted on the dismissal of Mr. Palacios after the appropriate debate.  The decision was supported by 19 votes in favour and 18 against. The Board of Directors must now decide on the election of a new Managing Director and approve their appointment.

This decision is based on the disparity of views that the members of the Board had in recent months regarding how to address the challenges facing the SGAE as well as the lack of viability of some of the suggested strategic measures to be implemented in the future.

These circumstances were compounded by serious discrepancies with respect to some accounting criteria, which the Managing Director did not satisfactorily inform the senior management of.

In the last six months, the dismissal of the Managing Director has also been demanded twice by the Employees' Committee. The last was this Monday, when staff representatives released a communication addressed to the partners in which they insisted on the need to dismiss Mr. Palacios.

Additionally, at the proposal of the Chairman, the Board of Directors has created an Audit Committee that will supervise the effectiveness of the company's internal controls, internal audits and risk management systems, as well as discuss with the auditors the significant weaknesses of the internal control system detected during its development.

The Audit Committee will also supervise the process of preparing and presenting compulsory financial information, and will establish appropriate relationships with the accounts auditors in order to be kept informed of matters that may jeopardize their independence for consideration by this committee.