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LPP SAUPDATE: Poland's financial watchdog initiates proceedings to impose fine on LPP fashion
Poland's financial market regulator KNF has initiated administrative proceedings to impose a fine on listed fashion group LPP, KNF announced. In a statement sent to PAP Biznes, LPP pointed out that negotiations were underway on May 8-10, 2022, with details of the terms of the agreement being drawn up in the following days.
#We are adding LPP's response#
"KNF has opened proceedings in connection with the suspected failure by the company to comply with the obligation referred to in Article 17(1) in conjunction with Article 7 of the MAR Regulation1 by failing to promptly disclose to the public confidential information about the key terms and structure of the transaction for the sale by the company of 100 percent of the shares in RE Trading OOO, as agreed by the parties to the negotiations concluded on May 10, 2022," KNF wrote.
"In connection with the investigation undertaken by KNF, regarding the suspected failure to comply with the obligation to promptly disclose confidential information to the public, we would like to inform you that negotiations between the company and the investor were in progress from May 8 to 10, 2022, during which the terms of the potential transaction were determined," LPP wrote in the statement sent to PAP Biznes.
"The detailed content of the agreement was drawn up in the following days," the company added.
It was indicated that the decision to make the transaction was made on May 19, 2022, based on a draft agreement, including detailed terms of the sale. The company announced this fact on the same day, in a current report.
"For the purposes of communication about LPP's intention to exit Russia, the current report of April 28, 2022, in which the company announced its exit from Russia, also remains relevant," LPP pointed out.
"This means that market participants were already aware of the company's intention to divest its Russian assets as of April 28, 2022," it added.
LPP said that it remains at the disposal of Poland's financial market regulator KNF, should the need for further clarification or the resolution of doubts arise.
"We also emphasise that the initiation of proceedings by KNF in the above case is in no way related to the Hindenburg Research report and does not confirm Hindenburg Research's allegations," the company stressed.
"Currently, proceedings are underway at the District Public Prosecutor's Office in Warsaw on suspicion of manipulation of LPP's share price in connection with the publication of the Hindenburg report, in which the company has the status of an aggrieved party," it added.
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