The Croatian Financial Services Supervisory Agency (HANFA) on Monday stated that it had pressed criminal charges with the Office of the Croatian Chief State Prosecutor against Hungary's MOL and its executives on reasonable suspicion that they manipulated the market and committed white-collar crime.
Such crimes carry prison sentences ranging between one and eight years, according to a statement released by the Croatian regulator on Monday afternoon.
Last Wednesday, HANFA established that the Hungarian oil company MOL had manipulated the market, contrary to a ban from Article 465 of the Capital Market Act.
HANFA said that MOL had manipulated the market with its general offer for the purchase of stock in Croatian oil company INA, published on 15 December 2010, and later through the media, by deliberately spreading information which gave false and misleading signals for the purpose of acquiring INA stock.
HANFA found that with its general offer MOL proclaimed and stated a number of times that the purpose of acquiring INA stock was to give incumbent and former employees, as well as private persons who had purchased INA stock in an initial public offering, another chance to sell the stock to MOL, at a price significantly higher than on the market, which, according to HANFA, constituted information that gave false and misleading signals regarding trading in INA stock.
The offer was HRK 2,800 per share but after this process, MOL, the biggest stockholder in INA and an informed investor, started purchasing INA shares at prices ranging between HRK 3,650 and 4,016 per share, which was a hint for the regulator to conclude that MOL's ulterior motive was actually to acquire eventually more than 50 percent of the interest in INA.
A day later, MOL denied any allegations and accusations of market manipulation and announced that it would seek legal remedies against the decisions and actions taken by HANFA.
"HANFA is tendentiously trying to ruin the reputation of MOL. MOL will not allow this and will exercise available legal remedies against HANFA decisions and actions," MOL said.
"Our intention was always crystal clear and we communicated it straightforwardly and honestly. HANFA ignores the fact that MOL made its offer in December 2010 for the entire free-float of INA shares i.e. 8.09%. HANFA tendentiously ignores the fact that MOL did not acquire a single share during the period of the private offer but the ones offered to it (altogether 10.082 pieces)," the statement said.
The suspension in trading with INA shares on the Zagreb Stock Exchange has been in force since 28 April, when HANFA imposed a temporary halt in trading with the explanation that it wanted to protect protect investors and insurers.
The suspension will be in place until the end of the urgent monitoring procedure.
