Penalty for failure to report

More than 2,000 companies listed on RASDAQ received a warning from the National Securities Commission (CNVM) for not having filed the 2002 financial reports. The decision could be followed by significant fines in case full financials are not sent to the Commission within 15 days.

“The companies risk paying a fine of 0.5%-5% of their share capital subscribed and deposited,” Ciprian Ene, CNVM spokesman said.

The 2,190 companies punished this way include insurers Astra Bucharest and Ardaf Cluj, Petrotel-Lukoil Refinery, Argus Constanta, Roman Brasov or Siderurgica Hunedoara. Petrotel-Lukoil for instance totals 2,080bn ROL in share capital so that a 0.5% fine would amount to more than $300,000.

The decision made at the end of last week is the first to punish together all the publicly listed companies for failing to comply with the legal requirements to provide information.

Capital market sources say punishing the members of the corporate Boards of Directors has been discussed, as well, but that would have entailed at least 10,000 penalty orders. Such a step is not ruled out, though, in the case of those companies that do not file the full annual report within two weeks.

CNVM has previously punished individual companies by mainly suspending their shares from trading, yet this was only hurting investors.

The shares of the companies that received the warning will be possible to keep trading on RASDAQ. Many listed companies, however, comply with their obligation to file reports with CNVM, but not with the requirement to issue a copy of the report to the market on which their shares are traded so that investors get no update from companies, and the companies get away with it.

“Some companies have not sent us the reports, albeit we told them to. Such an example is Uzinexport Bucharest,” Adrian Resmerita, head of RASDAQ’s issuer department told Ziarul Financiar.
vlad.nicolaescu@zf.ro