In December 2017 the FCA fined Tejoori Limited (a small investment company) £70,000 for failing to disclose inside information to the market as required under Article 17(1) MAR, implemented 3 July 2016. Article 17(1) requires an issuer to inform the public as soon as possible of inside information which directly concerns that issuer.
Tejoori had two major investments, one of which was a 10% shareholding in BEKON Holding AG (BEKON), valued at US$3.35m. On 12 July 2016 Tejoori was notified that it was required to sell its shares for no initial consideration and sign a Share Purchase Agreement, as Eggersmann Gruppe GmbH & Co. KG (Eggersmann) was completing a compulsory acquisition of BEKON. This constituted inside information, but Tejoori did not disclose. The market, therefore, did not have the details of the transaction and could only speculate about amounts that had been paid to Tejoori, resulting in the share price increasing by 38% over two days.
Tejoori issued a statement to the market on 24 August 2017 confirming it had sold its BEKON shares for no initial consideration, and that they would also be unable to assess whether they would receive any future consideration. Their shares dropped by 13% on the same day. Mark Steward, the executive Director of enforcement and market oversight of the FCA, said that “Tejoori’s failure to promptly disclose inside information misled the market in Tejoori’s shares and prevented investors from making fully informed investment decisions. This was a serious breach. Issuers must have regard to their disclosure obligations at all times and misunderstanding the commercial reality of a transaction is no excuse.”
Tejoori cooperated fully with the FCA’s investigation, notifying the FCA of their breach and the proceeding and subsequent events. The company also agreed to settle at an early stage, thus qualifying for a 30% discount. Without this discount the penalty would have been £100,000.
The company has subsequently cancelled its admission to trading on AIM.
ONE Advisory can help AIM Companies with their insider information under MAR, as well as other MAR requirements, including, but not limited to, PDMR dealings and market sounding prerequisites. Please contact Laura Nuttall (firstname.lastname@example.org) or Liam O’Donoghue (email@example.com) for further information.