The Disciplinary Committee of OMX Nordic Exchange Helsinki has issued Ruukki
Group Plc with a warning for breaching stock exchange disclosure rules.
On February 12, 2008, shareholder A and future shareholder B entered into an
agreement on shares of the Ruukki Group Plc. According to the agreement, the
ownership of A would fall below one tenth of the share capital and voting rights
and B would become a major shareholder of the company, in case the agreement was
fully implemented. The agreement was entered into on behalf of A by a manager
who is also a Member of the Board of Directors of the Ruukki Group Plc. In the
morning of February 13, 2008, A and B published together a press release
regarding the agreement as well as the strategic plans included in the
agreement. This press release was distributed widely among the media by 9.55 am.
The company disclosed the press release at 12.43 pm. The share price had risen
almost 10 % after the first press release, but before the company's disclosure.
The company's disclosure did not have any material impact on the share price.
The Exchange asked the Disciplinary Committee to decide whether the company had
disclosed the information promptly and fulfilled the requirements of
simultaneous disclosure.
Statement of the company
Ruukki Group plc stated among other things that the content of the shareholder
A's press release was not known by the company until it was published in a press
release. The press release was conducted by A and it represented the opinions of
A. The Board of Directors or the CEO of Ruukki Group Plc had not considered the
matter or had any view on the matter. According to the company's view it had
taken prompt own initiatives in clarifying the matter, which had enabled prompt
disclosure of the company's press release regarding the change in the ownership.
Statement of the Disciplinary Committee
The issuers of listed securities must promptly disclose any decisions taken by
the issuer and any facts and circumstances pertaining to the issuer that may
tend to materially affect the value of its listed securities (Rule 3.1.4). In
this case the agreed change in ownership in the company was tend to materially
affect the value of company's listed securities, due to the size of the intended
transaction and due to the importance of the counterparties' disclosed strategic
intentions. The Disciplinary Committee considered that a Board Member's actions
as a shareholder affect neither his/her position as the Member of the Board or
his/her diligence responsibilities towards the company. The Committee
considered, in line with the precedent given on the January 28, 2004, that the
information is reached by the company when any member of the board of directors
or the managing director has been informed of the matter. Committee considered
that in this case the ongoing disclosure requirement began from the moment the
agreement was entered into and not from the moment the management discovered the
information from the press release. The company's disclosure obligation had
emerged on February 12, 2008. Thus, the company had not disclosed the
information promptly.
The disclosure of information refers to its simultaneous delivery to the
Exchange and to major mass communications media (rule 3.1.8). Further, according
to Exhange rules (3.1.1.) the purpose of disclosure requirements is to make sure
that all market participants have contemporaneous access to true and fair
information regarding listed securities and their issuers such that an informed
assessment can be made of the value of shares and other listed securities.
Investors use information disclosed by issuers in evaluating their listed
securities. In this case the information was first delivered to media through
counterparties' press release, and disclosed by the company only afterwards. A
member of the company's Board of Directors was, however, involved in the
disclosed agreement. The Disciplinary Committee stated that in this case the
information had not been made available simultaneously to all market
participants in that manner that an informed assessment could have been made of
the value of shares. This was evident taking into consideration the considerable
change in the company's share price before the company disclosure. Due to these
breaches the requirements in Rules 3.1.1. and 3.1.8 were not fulfilled.
On the other hand, the Disciplinary Committee took the view that after receiving
the information, the company's management had taken appropriate measures and
disclosed information in a prompt way taken the situation into consideration.
This, however, does not affect the company's responsibility over it's Board
Members' actions. On January 28th 2004, a precedent had been issued on a case
with similarities to this case, based on which the breach can not be considered
minor. These factors were taken into account when deciding on the appropriate
sanctions.
Decision
The Disciplinary Committee found that Ruukki Group Oyj had breached the Exchange
rules 3.1.1, 3.1.4 and 3.1.8. Committee issued the company with a warning.
For further information, please contact:
Timo Rintanen, Secretary of the Disciplinary Committee +358 9 6166 7640
Janne Seppänen, Head of Surveillance Helsinki, +358 9 6166 7382
OMX Nordic Exchange Helsinki market supervision
OMX Nordic Exchange Helsinki investigates all suspected rule violations. For
minor violations, companies are given a written warning while serious cases are
brought to the Disciplinary Committee for decision.
The members of the Disciplinary Committee are legal and financial experts
independent of OMX Nordic Exchange Helsinki. The Chairman of the Committee is
Mr. Mikko Tulokas, Supreme Court Justice, and the members are Professor Risto
Nuolimaa, Professor Kalervo Virtanen and Mr. Simo-Pekka Helander, LL.M.
OMX Nordic Exchange Helsinki donates its disciplinary fines to a foundation that
sponsors research related to securities markets in Finland and Sweden. Further
information about the Disciplinary Committee, its members and the regulations of
the Disciplinary Committee are available from the OMX Nordic Exchange Helsinki
website at www.omxnordicexchange.com.
