As a shareholder in DNO put ourselves at significant risk. Unfortunately, not all risks to find outside the company.
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Oil Company DNO is one of the riskiest investment you can make on Oslo Børs. Many are willing to take the risk because the potential gains are significant. In recent years, much of the risk has been the extent to which self-government authorities in Kurdistan would put in place an oil law and the ability to export oil. Prior to this, much of the risk associated with the lack of corporate governance and former chairman Berge Gerdt Larsen who ruled the company as if it were his own.
HovedindeksenDet past six years it has come new risks to. IS militia many brutal attacks against cities and infrastructure in northern Iraq have led to fears that the DNO’s production facilities could be affected.
These are risks outside DNO control. Unfortunately, the past year also shown that there are risks associated with corporate governance and DNO’s new rulers. DNO’s new principal owner Rak Petroleum, with nearly 43 percent of the shares, has conducted a series of questionable transactions that are not perceived as value-added for the other shareholders of DNO. Among these is that DNO has acquired several shareholdings in its own main shareholder Rak Petroleum, an illiquid stock few are able to appreciate.
DNO has a very open shareholder structure, if one disregards Raks dominant ownership position. The second largest shareholder in DNO is Clearstream Banking as a nominee by 1.8 per cent. With a large shareholder and a number of very small shareholders can Rak do much as it would without being controlled by other shareholders. It should be taken into account when considering investing in the company.
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