The Committee of the Admission Board issued and published a reprimand against Kühne + Nagel International AG (K+N) because the company had published its segment results at EBIT (earnings before interest and taxes) level in its 2003 consolidated financial statements, but in its 2004 semi-annual report without goodwill amortizations at EBITA (earnings before interest, taxes and amortization) level. K+N appealed against publication of the sanction and the amount of the procedural costs. K+N argued that publication of the sanction would contravene the principle of proportionality and that its own interest in maintaining a flawless reputation in the public eye would have to be weighed against the interest of the SWX.
The Disciplinary Commission in turn established that the purpose of publishing sanctions and informing the market accordingly is to show that the SWX actively pursues any failure to observe its rules and regulations. It is SWX's duty to credibly verify compliance with its rules and to impose the necessary sanctions. A situation cannot be allowed to occur where interest in maintaining a flawless market is weighed against an issuer's interest in maintaining a flawless image. The present case constituted a major breach of the applied IFRS (International Financial Reporting Standards).
The Disciplinary Commission further established that the SWX levies procedural costs on a time-spent basis. Procedural costs resulting from market participants should, where possible, not be charged to SWX's other expense. Under due consideration of all cost aspects, the procedural costs imposed in the present case were deemed plausible.
Periodic reporting in compliance with applicable accounting regulations is part of the information that contributes to transparent trading, as required by the Swiss Stock Exchange Act and the SWX Listing Rules. One of the tasks of SWX is to ensure that the transparency rules imposed on issuers are enforced.
Information on financial reporting regulations can be found at: http://www.swx.com/admission/being_public/accounting_en.html
Sanctions imposed to date in connection with financial reporting can be found at: http://www.swx.com/admission/being_public/sanctions/accounting_en.html
