Panevėžio statybos trestas AB fined EUR 40 thousand for not disclosing information to investors
The Supervision Service of the Bank of Lithuania has identified that Panevėžio statybos trestas (PST) AB has violated the Market Abuse Regulation and thus fined the Company EUR 40 thousand.
‘The Company was supposed to publish information about the investigation carried out by the Competition Council when it appeared in the public domain; neglecting our recommendations, it did not do that, however. The news produced a negative reaction from the market and possible losses for the investors, while PST took no action to remedy the situation,’ said Vytautas Valvonis, Executive Director of the Supervision Service at the Bank of Lithuania.
On 13 December 2017, information was announced in the public domain that the Competition Council had, already since August 2016, been carrying out an inspection regarding a possible cartel agreement between Panevėžio statybos trestas AB and another company. For such offences, the companies may be subject to a pecuniary charge of up to 10 per cent of their annual income for the previous business year. The maximum fine could amount to more than a fifth of PST’s own capital and exceeded its net profit for 2016 by almost five times; consequently, it could significantly affect the Company’s financial situation.
The publicised information prompted a reaction from the investors and affected the market price of Panevėžio statybos trestas AB shares (over 14 December, their price fell by almost 4 per cent). In view of the market reaction, Bank of Lithuania specialists drew Panevėžio statybos trestas AB’s attention to the legislative requirements, recommending to immediately release a notification and explain the situation. PST did not take the recommendation into notice.
On 20 December 2017, the Competition Council announced that, for the agreement which limits competition, it fined PST EUR 8.5 million.
The Bank of Lithuania has identified that Panevėžio statybos trestas AB knew about the investigation which was carried out by the Competition Council and possible consequences, but decided not to disclose the information until the Competition Council takes an official decision.
According to the Market Abuse Regulation, PST was supposed to notify market participants as soon as the information about the investigation carried out and possible consequences was made public. Panevėžio statybos trestas AB did not do that on time and the investors could bear almost EUR 16 thousand in losses as a result.