On October 7, 2005 TJ Group Plc issued a stock exchange release disclosing that TJ Group Plc will divest the business operations of Key Partners Oy. The Disciplinary Committee noted that it is un-disputed that the sale of Key Partners Oy’s business operations was a significant divestiture for the company and should have been disclosed as such in accordance with the rules. The company dis-closed the information required by the rules of the Stock Exchange in several parts by means of stock exchange releases issued on October 7, 2005, October 10, 2005, October 17, 2005 and October 20, 2005. In its rejoinder the company pleaded to the difficult circumstances of the company, includ-ing legal proceedings due to which management was hard to reach, and that the divestiture required approval by the General Meeting of Shareholders.
The Disciplinary Board considered that the information was not made public without undue delay useful in assessing the impact that the fact will have on the issuer’s financial condition and future operations. In its assessment the Disciplinary Board considered the management’s diligence obliga-tion to include careful consideration of the disclosure obligation in connection with preparations for an acquisition or divestiture. The existence of an obligation to disclose information is not affected by the fact that the final execution of a transaction is subject to the approval of a body such as the Gen-eral Meeting of Shareholders or a public authority. Inability to reach the company’s managers cannot be considered an acceptable reason for delay.
The Disciplinary Board has previously cautioned the company for failures to disclose information in 2000, and the Secretary of the Board has reminded the company of lesser flaws in disclosure in 2002 and 2005. On the basis of this, the Company’s management should have taken the appropriate meas-ures to make the Company’s disclosures compliant with the regulations.
The Disciplinary Board considered that the issue cannot be regarded as minor because the release of October 7, 2005 was significantly deficient and did not make it possible to assess the impacts of the transaction. The Company also failed to comply with the Helsinki Stock Exchange’s request to dis-close additional information without undue delay. These facts and the recurrence of prior breaches prove the corporate management’s disregard for the Rules of the Helsinki Stock Exchange.
The Disciplinary Committee of the Helsinki Stock Exchange issued TJ Group Plc with a warning for breaching the Rules of the Helsinki Stock Exchange. In addition to the warning, the Disciplinary Committee ordered TJ Group Plc to pay a disciplinary fine of fifteen thousand euros (EUR 15,000) to Helsinki Stock Exchange. When determining the amount of the disciplinary fine, attention has been paid to the nature of the matter, as well as the size and circumstances of the company.
Helsinki Stock Exchange and Stockholm Stock Exchange donate their disciplinary fines to a founda-tion that sponsors research related to securities markets in Finland and Sweden.
According to Rules 3.2.49 and 3.2.52 of the Helsinki Stock Exhange, significant ac-quisitions and divestitures must be disclosed. Any information release regarding a business acquisition or divestiture must disclose, among other items, the sales price, the basis on which it is determined, and any other key terms and conditions of the transaction. The listed company’s relative ownership and voting power in the ac-quired or divested entity must also be disclosed, as well as the major lines of the en-tity’s business, its historical financial performance, and financial condition.
According to Rule 3.1.5, information made public by the issuers of listed securities must be useful in assessing the impact the decision, event or other facts and circum-stances disclosed will have on the issuer’s financial condition and future operations. All information disclosed must have a basis in fact. The Exchange may, for cause, re-quire an issuer to disclose supplemental information with regard to any matter dis-closed in accordance with this Rule.
