Madrid Mayor Ana Botella said on Monday that the city council of Madrid "will immediately rescind" contracts with the Internet network company Gowex if the company's accounts are false, local media reported on Monday.
The president of the company, Jenaro Garcia, presented his resignation on Sunday after admitting false accounts for at least the past four years.
Botella told reporters that she was very surprised by the situation at the company, which solicited opening bankruptcy proceedings because it could not face its debts.
Madrid has "a few" contracts with Gowex in some squares of the city and centers for technological innovation, the mayor said.
Gowex had been a successful company. Its president won Ernst and Young Entrepreneur of the Year award in 2011 and the Spanish Emprendedora prize for his work.
However, a report by Gotham City Research showed recently that Gowex' shares were worthless and a big proportion of the company's income did not exist. As a result, the company's shares fell by 60 percent in two days and the Alternative Stock Market (MAB) suspended trading.
Shares of the 20 companies trading on the MAB were falling on Monday morning due to the financial crisis at Gowex. The companies Carbures, Ibercom and Neuron suffered the biggest falls on Monday, falling 12.95 percent, 12.93 percent and 11.48 percent respectively.