FCMC fines Vasilijs Meļņiks and ”Remars-Rīga” for failure to make mandatory buyout offer of ”Rīgas kuģu būvētava” shares

21.08.2014
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Press Release
Riga, 20.08.2014

FCMC fines Vasilijs Meļņiks and ”Remars-Rīga” for failure to make mandatory buyout offer of ”Rīgas kuģu būvētava” shares

After having examined the likely concerted action of shareholders of the joint stock company ”Rīgas kuģu būvētava” and closing an administrative case thereof, the Financial and Capital Market Commission (FCMC) decided to impose a maximum applicable fine on the shareholders Vasilijs Meļņiks and the joint stock company ”Remars-Rīga” in the amount of EUR 14 200 each for failure to make a mandatory share buyout offer to other shareholders in the company.

The examination of the fact that several entities likely acting in concert have jointly acquired a qualifying holding of above 50 percent of voting shares in ”Rīgas kuģu būvētava” was launched by FCMC in 2012. During the investigation, the FCMC obtained information and new facts about the share selling transaction verifying that ”Remars-Rīga” had actually owned above 50 percent of ”Rīgas kuģu būvētava’s” shares. Vasilijs Meļņiks, as the owner of controlling interest in ”Remars-Rīga”, in accordance with the provisions of the Law on the Financial Instruments Market (the Law), indirectly held more than 50 percent of total voting shares in ”Rīgas kuģu būvētava”.

Shortly before the above decision by the FCMC Board, there was a deal carried out to reduce the actual holding of ”Remars-Rīga” in ”Rīgas kuģu būvētava” below 50 percent, consequently Meļņiks’ indirect holding shrank below 50 percent as well. As a result, the FCMC could not require ”Remars-Rīga” and Meļņiks to make the mandatory share buyout offer to other shareholders in ”Rīgas kuģu būvētava”, because the conditions laid down in the Law no longer existed.

However, since regulatory requirements for the financial instruments market were violated, i.e. provisions of Subparagraph 1 of Paragraph 1 of Article 66 and Paragraphs 1 and 2 of Article 70, and after evaluation of legal and actual circumstances and duration of the infringement, the FCMC decided to punish Meļņiks and ”Remars-Rīga” with the EUR 14 200 fine each, the maximum applicable penalty in this case. The fines must be paid into the state budget in one month of the FCMC decision taking effect.

Besides, the FCMC points out that the ”Rīgas kuģu būvētava’s” shareholders, who are convinced that they have suffered damage resulting from the failure to make mandatory share buyout by ”Remars-Rīga” and Meļņiks in accordance with the procedure laid down in the Law, may make claim against ”Remars-Rīga” and Meļņiks for their losses to the court.

The FCMC releases information about its decision to notify the financial instruments market operators and other parties of the results of examination and conclusive decision.

According to the Administrative Procedure Law, an administrative act issued by the FCMC may be disputed in one month or appealed to the Regional Administrative Court.

Further information:
Marija Makareviča
Public Relations Specialist
Communications Division
Financial and Capital Market Commission
Telephone: +371 67774808; email: marija.makarevica@fktk.lv

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