"Hungarian financial markets watchdog (PSZÁF) has announced on Friday it has fined Austrian oil and gas group OMV HUF 25 million for breaking rules on influencing the market and on takeovers when it announced on Tuesday it was prepared to offer HUF 32,000 per share to shareholders of Hungarian sector peer MOL.Although OMV stressed the announcement was not a public purchase offer when asked by the watchdog, PSZÁF said the announcement did mislead investors.
PSZAF noted that OMV had made differing statements regarding its stance on purchasing the shares in the announcement. OMV said it "was prepared to offer MOL shareholders HUF 32,000 per share" in one part of the announcement but "currently prepared" in another, thereby failing to give shareholders a timeframe for the validity of the offer. In yet another line of the text, it said it was prepared to pay the price only if certain conditions - among them the abolishment of a 10% cap on voting rights - are met, without informing investors of a sequence of planned moves ahead on which to base their decisions regarding the shares.
PSZÁF noted that, given OMV's repeated failed attempts to negotiate with MOL's management, and the fact that the company did not give any time frame for meeting the conditions it set in its declaration of intention, OMV must have been aware it was giving misleading information.
OMV was quick to protest in a statement, as follows:
“OMV protests against the decision of the Hungarian Financial Markets Authority and in particular against the legal procedure that led to this decision. OMV will take all available legal means in order to challenge this decision."
“OMV was subject to a “speed proceeding", that contradicts the fundamental right to be heard which is valid both in Hungary and in the European Union: OMV's lawyers received a fax from the Hungarian Financial Markets Authority on September 26 at 11am (only in Hungarian, without an English translation), in which the allegations regarding market manipulation against OMV's Declaration of Intent [to combine OMV and MOL] were set out in detail for the first time."
“In addition, OMV was asked to comment on these allegations by 4.30pm on the same day at the latest. Since it was impossible for the lawyers to arrange for a translation of the Hungarian text or to consult OMV in an adequate manner which reflects the importance of this matter within this short period of time, the lawyers contacted the Hungarian Financial Markets Authority at 4.30pm, requesting an extension of the short time limit. The request also specifically referred to the fundamental right to be heard."
“On 27 September the lawyers received the decision of the Financial Markets Authority, in which the extension of the time limit was denied and OMV was fined a sum of EUR 100,000."
“The Hungarian administrative regulations, the Hungarian constitution and the European Convention of Human Rights provide that in proceedings with punitive character the accused must in the course of a fair trial have the opportunity to examine the allegations put forward against him/her and to comment on these within an adequate time period."
“OMV also strongly rejects the content of the allegations and points out that the central reason for issuing the Declaration of Intent was, in fact, to increase market transparency and certainly not to manipulate the market."
Source:
Portfolio Online Financial Journal
01.10.2007