Periodic financial reporting in compliance with applicable accounting rules constitutes an in-tegral part of the information that contributes to the transparency of trading as stipulated by the Stock Exchange Act and the SWX Listing Rules. It is the responsibility of SWX to ensure that issuers comply with these transparency regulations.
In January 2003, SWX initiated an investigation involving the 2001 annual report of EMTS Technologie AG. This investigation was conducted in connection with a suspension of trad-ing that the company had requested as a result of the determination by its new management that there were potential irregularities in the books of EMTS.
SWX's investigation into this matter was primarily based on a forensic audit conducted by a major auditing firm. According to the forensic report submitted by those auditors, EMTS's 2001 annual financial statements reflected consolidated revenues and net profit that, among other things, had been deliberately manipulated through the inclusion of various fictitious in-voices. The company's 2001 consolidated net profit was overstated by at least € 2,352,000. These irregularities clearly caused investors to be severely misled.
The sheer magnitude of the irregularities involved in the case at hand fundamentally would have argued for a much harsher sanction. However, taken into account in the determination of the penalty was the fact that the company, once it had become aware of the irregularities, immediately informed the public and SWX on its own volition and without any outside pres-sure. With the aid of the forensic audit commissioned by EMTS, those individuals responsible for the irregularities were identified. Moreover, the company's new management initiated criminal proceedings against the culpable former managers of EMTS and saw to it that the latter were immediately dismissed once the irregularities had been identified. Also taken into consideration was the fact that the company had never been sanctioned by SWX in the past.
For those reasons, the Committee of the Admission Board has decided to publish a repri-mand against EMTS Technologie AG.SWX is of the hope that EMTS's new management can rapidly and successfully master the problems that were unearthed during this investigation.
