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The London Stock Exchange today issued a public censure and fine of £600,000 against Regal Petroleum plc ("Regal" or "the Company"). These sanctions were imposed by the AIM Disciplinary Committee for numerous, serious breaches of the AIM Rules in connection with its oil exploration wells in the Kallirachi Prospect, an area in the North Aegean Sea.
On 11 separate occasions, Regal failed to take reasonable care to ensure that its announcements were not misleading, false or deceptive, and did not omit material information. On two occasions, Regal also failed to release price sensitive information without delay.
In particular, Regal contravened AIM Rule 9 (equivalent to the current AIM Rule 10) by:
- using language in its announcements that created a misleading impression as to the potential commercial viability of the Kallirachi Prospect;
- being over-optimistic in the information it notified, focussing on the higher end of expectations without adequate explanation of this fact, and omitting an adequate description of the risks associated with the Prospect; and
- not accurately reflecting in its announcements the test results from the Kallirachi wells or the conclusions of independent experts on which the announcements were based
In contravention of AIM Rule 10 (equivalent to the current AIM Rule 11), Regal failed to announce without delay poor test results and the plug and abandonment of the two wells drilled within the Kallirachi Prospect.
Nick Bayley, Head of UK Regulation at London Stock Exchange Group, said:
"Today's public censure and fine closes an exceptional case in AIM's history. It is unprecedented in terms of the seriousness of the rule breaches involved and the resultant market impact. These factors contributed to the AIM Disciplinary Committee's decision to impose the highest fine in AIM's history.
"Following an investigation by the Exchange and the FSA, the Exchange's action was contested by Regal, resulting in lengthy disciplinary proceedings. Today's action demonstrates that the Exchange takes the accurate and timely disclosure of price sensitive information by quoted companies very seriously. Whatever the size, profile or complexity of the breach, the Exchange is prepared to take firm action against companies that fall short of the required standards."
Full details of the breaches can be found in the censure.
