Helsinki, December 1, 2022 - The Disciplinary Committee of Nasdaq Helsinki Ltd
has imposed a warning and a fine of EUR 40,000 to Dovre Group Plc (trading
code: DOV1V) due to the breaches of the Nordic Main Market Rulebook for Issuers
of Shares (the "Rules") of Nasdaq Helsinki Ltd ("the Exchange"). Dovre Group
Plc ("the Company") breached the Rules on the disclosure of inside information
when announcing agreements of its subsidiary in May and October 2021.
Furthermore, the Company breached the Rules on organizing the administration of
the listed company.
Events
On May 28, 2021 the Company had disclosed a release, classified as inside
information, stating that its subsidiary Suvic Oy, that was acquired on March
31, 2021, had started three significant wind farm constructions in May. The
information on the execution of Puskakorpi wind farm agreement had been
received by the subsidiary on May 19 and by the Company on May 20, 2021.
According to the Company's published Information policy this construction
agreement had been considered significant and as such to be disclosed as inside
information. The Company had handled the execution notice as inside
information, but the Company had neither decided to delay its disclosure or
notified the Financial Supervisory Authority about the delayed disclosure.
Further, a third party of the Puskakorpi wind farm project had published a
press bulletin on May 26, 2021, being available on the internet, including
information on the participation of Company's subsidiary to the whole
construction project of the wind farm.
Also, on October 4, 2021 the Company had disclosed wind farm construction
agreements concluded by its subsidiary during summer 2021. The release had been
marked as inside information and disclosed under the class of inside
information. After, when reviewing the matter, the Company had stated that the
agreements had not exceeded the defined threshold of materiality as applicable
by the Company's Information policy and were not inside information. The
disclosed stock exchange release mentioning the start of the wind farms
constructions and their joint value did not include false information on
constructions agreements as such. The Company had not treated those agreements
as inside information at the time.
Content of the regulations
According to the Rules and the Market Abuse Regulation the inside information
shall be disclosed as soon as possible in such a manner that information is
available in a non-discriminatory way enabling fast access by the public and
that a complete, correct and timely assessment of the information can be made.
The regulation requires that information is available for investor
simultaneously. The regulation allows the delayed disclosure of the inside
information on the responsibility of the issuer, if the requirements for the
delay are fulfilled, and the decision on the delay must be notified to the
Financial Supervisory Authority. However, the binding regulation does not allow
the listed company to avoid or evade its disclosure obligation for example by
entering into an agreement with another party stating that the information
should not be disclosed.
Further, according to the Rules, it is prohibited to provide false or
misleading information upon fulfilling the disclosure obligation.
According to the Rules the Issuer shall have in place adequate working
procedures both at the level of the Board of Directors and within the
management. Furthermore, the issuer shall arrange its administration, including
financial reporting and monitoring, in a manner enabling the compliance with
its obligations as a listed company. The purpose is that the listed company can
provide the market with timely, reliable, accurate and up-to-date information.
The purpose of the regulation is, for its part, to secure public confidence to
the securities markets as well as the possibilities of the Exchange to arrange
equal and reliable market venue.
Disclosure of inside information
The Disciplinary Committee states in its decision that the Company should,
based already on its practice, have disclosed the execution of the Puskakorpi
construction agreement on May 19, 2021 or should have decided to delay its
disclosure if the requirements on delay had existed. Because the disclosure of
a material construction agreement have taken place not until on May 28, 2021,
the Company has neglected to disclose the inside information on Puskakorpi
project as soon as possible in accordance with the rule 3.1.1 of the Rules and
article 17 of the market abuse regulation. The Disciplinary Committee finds in
this case that the delay of the disclosure of inside information is
significant. In addition the Disciplinary Committee states that the issuer
shall take care of that, in relation to business acquisitions, its legal
position as a listed company will be properly taken into consideration. The
issuer cannot to avoid or evade its disclosure obligation based on a secrecy
provision. The conclusion of the Disciplinary Committee is that the Company has
breached the rule 3.1.1 and rules 14 and 15 (i) of the Supplement B of the
Rules.
Provision of misleading information
According to the Disciplinary Committee it is the responsibility of an issuer
to assess whether an information concerning it is inside information, so, for
example, what agreements prepared and negotiated from time to time are
potentially material to the value of its share. The Company said that the
incorrect disclosure was deriving its origin from the Company's ambiguous
information policy and from a human error when interpreting it. Also, there was
the difficulty to follow the disclosure threshold which was result from the
quick growth and doubling of the revenue figure, used as a benchmark. Further,
the Company stated that the size of wind farm project compared to revenue
forecast was only slightly below the disclosure threshold (10%) defined by it.
That could have supported the publishing of the release as inside information
when disclosing the execution of wind farm project. The Disciplinary Committee
states in the decision that the reasons for the error presented by the Company,
even though partly understandable, do not in this case decrease or remove the
relevance of the incorrect operation when assessing the breach. When it comes
to securities markets and investors the conduct of the Company was
inappropriate and it can be interpreted also as misleading.
The Disciplinary Committee concludes in its decision that the Company has
breached the rule 3 of the Supplement B of the Rules concerning the prohibition
on providing misleading information. The Company had provided incorrectly named
and categorized information when disclosing information that it in fact did not
consider as inside information. Taking into consideration firstly that the
Company had earlier in 2021 disclosed information of similar types of wind farm
constructions and secondly that the release on October 4, 2021 was not
expressed to include otherwise incorrect information, the error occurred with
the disclosure by the Company cannot in this case be considered as particularly
serious or objectionable when assessing its potential misleading nature.
Organization of the administration
Based on the information received, the Disciplinary Committee states that the
Company's administration and disclosing of information have been aimed to be
organized by the Company in such a manner that the Company can comply with
rules of the disclosure obligation. This is indicated by the fact that the
Company has had the information policy and person in charge of informing. Also,
for example, the Company provided altogether seven profit warning releases
during the period of two and half years' time when the growth of the company
was fast. In addition, the information policy defines the actions of the
Company if the information affecting materially to the value of its security is
leaked prematurely and unintentionally to the public.
Despite of the above mentioned the Disciplinary Committee states that there
also has been severe deficiencies in the administration of the Company
regarding the releasing of exchange information. As a listed company the
Company should have more carefully prepared itself to the practical impacts of
the acquisition disclosed on March 31, 2021 regarding the disclosure obligation
and the procedure of internal information flow in the new situation between the
Company and its subsidiary. The Company has, per se, admitted that its
administration relating to the informing on wind farms constructions of Suvic
Oy had not been organized in accordance with the rules.
The Disciplinary Committee states also in its decision that the conduct of the
Company when disclosing the releases of May 28 and October 4, 2021 has been
contradictory with its own information policy. This and the above mentioned
events relating to the releases indicate the lack of knowledge when applying
the rules for listed company especially on defining the inside information,
timing of the disclosure and the classification of releases. Partly this is
indicated also by the reminder that was imposed to the Company by the
Exchange's Market Surveillance. The Company had on October 27, 2021 published a
profit warning late by disclosing it on the next day after it had been decided.
The Company had not made the notification of the decision on the delay to the
Financial Supervisory Authority after the disclosure of the release of May 28,
2021 and the Company had neither presented having specifically decided or what
grounds to delay the disclosure of the inside information relating to the
execution of the Puskakorpi project. However, the Company had started to obtain
a publication permit from its contractual party. The Disciplinary Committee
says in the decision that this indicates, firstly, that it has not been clear
for Company when a decision to delay the disclosure could have been made and
secondly, that the Company was not properly prepared for disclosing the inside
information relating to the Puskakorpi wind farm. The permission needed for the
disclosure should have been obtained in advance.
After assessing the matter as whole, the Disciplinary Committee concludes in
the decision that the Company has not organized its administration in
accordance with Exchange's rules when informing about the wind farm
constructions started in May, August or October 2021. Thus, the Company has
breached the rules 2.15.1 a) and 2.15.3 a).
Assessment of sanctions
The Disciplinary Committee states in the decision that according to the Company
it has during the present year corrected all previous deficiencies regarding
releasing of information, disclosure of inside information, good governance and
internal procedures. The Company has taken actions to improve internal
knowledge on exchange rules and its information policy by educating key
persons. Also, it has updated its information policy and processes to avoid
ambiguousness in the future. Furthermore according the Company, it has improved
the internal communication of information especially relating to the agreement
phase.
When assessing the sanctions, the Disciplinary Committee has taken into account
the corrective actions by the Company. These remedial actions made afterwards
cannot however be given a crucial relevance in the sanctions assessment. The
Disciplinary Committee states in the decision that the several consecutive but
as separate considered rule breaches which occurred in quite short period of
time have been partly substantial and concerned the basic obligations of the
Company as a listed company. The negligence of timely and correctly disclosure
can have a weakening effect on the position of investors and the
trustworthiness of the operation of the securities markets and the Exchange.
Based on the aforementioned, and taking into account the assessment of the
whole, the Disciplinary Committee states in its decision that in this case the
Company shall be imposed a warning and a fine of EUR 40,000.
***
Surveillance at Nasdaq Helsinki and the Disciplinary Committee
The surveillance unit of Nasdaq Helsinki Ltd investigates all suspected
breaches of regulations. Minor breaches will result in reprimand to the
company, whereas more serious cases are referred to the Disciplinary Committee.
The members of the Disciplinary Committee are legal and financial experts
independent of Nasdaq Helsinki Ltd. The members of the Committee are Mr. Ari
Kantor, Justice, Supreme Court of Finland; Mrs. Helena Kontkanen, L. of Laws
and trained on the bench; Mr. Kari Hietanen, Master of Laws, Executive Vice
President; Mr. Markku Savikko, M. of Laws; and Mr. Sami Torstila, D. Sc, M. of
Laws, Associate Professor. The sanctions may be a reprimand, a fine or in an
utmost case a delisting. For more information about the Disciplinary Committee
please visit https://www.nasdaq.com/solutions/helsinki-disciplinary-processes
Nasdaq Nordic Foundation
The Disciplinary Committees of Nasdaq Helsinki, Nasdaq Copenhagen and Nasdaq
Stockholm may, in case of a breach by a member or a listed company, resolve to
fine the member or the listed company. The paid fine is transferred to the
Nasdaq Nordic Foundation for the promotion of the foundation's objective, which
is to promote scientific research of the financial markets in Finland, Denmark
and Sweden, providing impetus for increased competence and competitiveness for
these financial markets. Three of the directors of the Foundation shall have
extensive academic experience within the field of financial markets.
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