Bogdan Drăgoi loses the lawsuit with ASF over the failure to report exceeding the 5% threshold at BVB

Bogdan Drăgoi, CEO and president of Lion Capital (formerly SIF Banat-Crişana), has definitively lost the lawsuit with the Financial Supervisory Authority (ASF) regarding the failure to comply with reporting obligations for holdings in the shareholder structure of the Bucharest Stock Exchange (BVB), according to information available on the website of the High Court of Cassation and Justice of Romania.

The market regulator had fined the head of SIF in March 2023 with 10,000 RON for failing to report that SIF Banat-Crişana and SIF Muntenia (now Longshield Investment Group) had exceeded the 5% ownership threshold in the country's stock exchange operator in the first part of 2020. The ASF's reasoning for the sanction stated that since the former SIF Muntenia is managed by SAI Muntenia Invest, a company owned by the former SIF Banat-Crişana, it is presumed that the two SIFs were acting in concert concerning the BVB issuer.

Read ABIA LA UN AN DE CÂND ZIARUL BURSA I-A SEMNALAT SITUAŢIA ASF l-a sancţionat pe Bogdan Drăgoi pentru nerespectarea obligaţiilor de raportare

Under the capital markets law, if a person exceeds the 5% voting rights threshold of an issuer, they must inform the issuer, the market, and the regulator within four working days. In the case of the two former SIFs, this occurred in March 2020 when SIF Banat-Crişana acquired 1.43% of BVB, thus together with SIF Muntenia, exceeding the 5% threshold of the capital of the country's stock exchange operator. However, the SIF only reported the breach in February 2022, after it had, on its own, surpassed the 5% threshold at the beginning of the year. At that time, SIF Banat-Crişana and SIF Muntenia held 9.5% of the market operator.

In the ASF decision from two years ago, it was also mentioned that the situation had been brought to the attention of the SIF director through a report, but the management of the company objected, stating that since they had internal policies and procedures that did not allow for cooperation, they did not consider themselves to be acting in concert with SIF Muntenia regarding BVB. The authority completely rejected these objections.

The BURSA newspaper had noticed the situation as soon as the two SIFs reported their joint holdings in BVB, and based on information from the companies' reports, calculated that the threshold had been exceeded back in the January-March 2020 period, two years before the report was made. We addressed the Financial Supervisory Authority with a written request asking if SIF Banat-Crişana should have reported the threshold breach in 2020 and, if so, what measures should have been taken and by whom. ASF responded that they would answer our request, but they did not follow up.

Read SIF1 raportează că împreună cu SIF4 are peste 5% din BVB, la doi ani după depăşirea pragului

The entire situation highlighted significant deficiencies in our capital market. For three years, from March 2020 to March 2023, numerous shareholder meetings of BVB took place without the shareholders being informed by the issuers or ASF that SIF Banat-Crişana and SIF Muntenia controlled more than 5% of the stock exchange. The thresholds and their breach are crucial for informing investors, so they can know who holds significant stakes and make decisions based on that information.