The Board of Directors of Oslo Børs approved the following resolution: “Violation charges are hereby imposed on Scana Industrier ASA for a breach of the duty to publicly disclose inside information to the market pursuant to Section 5-2 (1) of the Securities Trading Act in an amount equivalent to three times the company’s annual listing fee, i.e. NOK 480, 000, cf. Securities Trading Act Section 17-4 third paragraph and Section 15-1, cf. Securities Trading Regulations, Section 13-1, and for a breach of the duty to publish a detailed stock exchange announcement no later than three trading days after entering into an agreement pursuant to Section 3.4 of the Continuing Obligations in an amount equivalent to the company’s annual listing fee, i.e. NOK 160, 000, cf. Stock Exchange Regulations Section 31 and Continuing Obligations Section 15.4.”
A brief summary of the case:
Scana Industrier ASA has not published in a timely manner information about non-payment in connection with the sale of a company. The payment relates to the sale of Leshan Scana Machinery Co. Ltd (“Leshan”) to Leshan Zhi Yuan Gao Di Mining Co. (“Zhi Yuan”). Zhi Yuan should have paid NOK 44.3 million by 30 May 2014 as one of several instalments of a shareholder loan granted to Zhi Yuan in connection with the sale. Payment was not made by the due date of 30 May, but was rescheduled following a meeting held on 20 August 2014 at which it was agreed that payment of the residual loan would take place in September and November 2014.
The missed payment represented 37% of the company’s market capitalisation at the due date. The Financial Supervisory Authority of Norway (Finanstilsynet) published the results of an inspection of the company’s accounts on 27 January 2015. The publication of this report, where attention was drawn to the late payment, had a negative impact on the company’s share price.
Additionally, the company has breached its duty to publish a detailed stock exchange announcement in connection with the final contract to sell Leshan in July 2013.