Large shareholders received shares off 98 percent: – This is not good, not good – Dagens Næringsliv

Thursday it was announced that the Oslo Stock Exchange has given the company Oxxy Group a fine, a fine, on one million.

• New marketplace on the Oslo stock Exchange as of January 13, 2016.
• the rules are less extensive than for companies listed on the main list of the Oslo Børs and Oslo Axess.
• Mercury market is not a regulated market, and is therefore not subject to the stock exchange Act and the stock exchange Regulations, any exchange asking investors to consider.

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Exchange believes the company is not enlightened enough about their rights to purchase shares as the largest shareholders in the company had in connection with recordings on Mercury engine, low-threshold-marketplace that Oslo Børs has created. The missing information represents violation of stock exchange rules, believe the Oslo Stock Exchange.

– This is not good, not good, says economics professor Thore Johnsen (69) at NHH when he hears what is the reason million fine for the company.

He warned in January this year against the Oslo stock Exchange’s new marketplace Mercury Markets. He believed immature companies on the stock market would weaken the Oslo Stock Exchange reputation.

– It is not created innovation by adding companies unprepared for Exchange – it creates scandals, said Johnsen.

“Very serious “

What has happened in this case is the following:

• Oxxy Group is registered in Cyprus and sells software for designing web pages. According to 2015 financial statements, which is the latest available, the deficit was just over 25,000 euros. Revenues were zero.
• equity was 436,000 euros, more than four million. The market value of the company on Mercury Markets for comparison throughout 258 million.

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The largest shareholders had given Oxxy Group an advance. This advance may be paid in shares, the company informed about had happened in a statement to the stock exchange in April – four months after the listing.

The shareholders got six million shares at an average price 53 cents when the advance was made up. The conversion of advances into shares, the number of outstanding shares with the whole 230 percent. When other shareholders got their shares sharply watered down. The price of 53 cents represented a discount of 98 per cent on the market price.

“Oslo Børs takes very seriously Oxxy Groups breach of the provisions of Mercury Market, as reflected in the fee. It has been rated stroking its shares from trading, but after an overall assessment, it was decided to impose the maximum fines. On new violations of Mercury Market rules will be placed considerable emphasis on this matter when assessing whether the Company’s shares will be suitable for further trade in the marketplace, “writes the Oslo Stock Exchange in a message.

– We look very serious about this, says communications manager Geir Harald Aase.

Sale initially

the two who got the lucrative deal was the founders and management of the company, the manager Dimitar Dimitrov and Chairman Lars Christian Beitnes’ company The White November Fund. Beitnes missed the DN inquiries Thursday while Dimitrov writes in an email that the company would comment on the decision in a statement to the Oslo Stock Exchange.

Just over three weeks before his company did buy shares cheaply, sold Beitnes’ company 430,000 shares in Oxxy Group to 31 billion, equivalent to 13.3 million. Sales first investment in the Oxxy was reduced from 45 to 28 percent. The White November Fund could next raise its stake to 55 percent thanks to the controversial share agreement.

Dimitrov owns 38 percent, according to company disclosures.

Oxxy Group admitted in a statement in July that it was insufficient information on major shareholders’ equity deal, and offered other shareholders to buy new shares. It ended with close to one million new shares were acquired at a price of NOK 1.50, according to an announcement from the company on Monday.

– Had not told the neighbor

NHH- Professor Johsen think that the case of Oxxy Group helps to confirm that he warned earlier this year.

– the new shareholders are not informed that they will be diluted, and that’s tragic. And then they need to be to cover a fine for that in reality they have paid too high a price. That amounts to sprinkle salt into the wound, says Johnsen.

And continues:

– Had I been new shareholder in the company, I had not told it to her neighbor.

– Even the best company may get hurt to keep things back, but there is clearly a greater likelihood that it will happen by this exchange. Partly because it is a less regulated exchange, partly because this is startup companies with heavy shareholders inside.

Inside shareholders and new shareholders will soon have conflicting interests, according to Johnson, because the old shareholders will sell out to the highest possible price, while the new will enter at the lowest price.

– One has to ask what prospectus control did and how it is, says Johnsen.

– Less extensive recording process

the response from communications manager Geir Harald Aase (46) on the Oslo stock Exchange that “Mercury Markets are not prospectuses.”

– You go through an admission document, and it is a less extensive admission process , he said.

– Is it higher likely for this kind of events at Mercury Markets, which Johnsen claims?

– No, why should it be there . Johnsen is right that Mercury Markets are less regulated, but when it comes to disclosure of material information so there is no difference, says Aase.

When Mercury Markets opened in January called Johnsen exchange an inquiry to “unprofessional [ investors] who happen to have money, but less insight. “

– We have not hidden the fact that it relates greater uncertainty for companies on Mercury Markets than the Oslo stock Exchange. But uncertainty is mainly commercial risks, not regulatory, responding Aase.

– What goes into the “overall assessment” not to strengthen the company?

– in it there is that most investors will be interested in that stock can still be traded. It is a very serious step to remove a company from trading. What is best for shareholders has been an important part of the overall assessment, says Aase.

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