Stockholm Stock Exchange’s Disciplinary Committee fines Wedins

Wedins Skor & Accessoarer AB has breached the company’s listing agreement with the Stockholm Stock Exchange by not providing information about an extraordinary general meeting in time and by not handling price-sensitive information in the correct manner. The Stockholm Stock Exchange’s Disciplinary Committee has decided to fine Wedins SEK 576,000.

According to the Stockholm Stock Exchange’s listing agreement, a listed company must immediately disclose when the Board of Directors makes a decision to convene an extraordinary general meeting. At a meeting of the Board of Directors of Wedins, held on September 27, 2005, the Board made such a decision but did not disclose the decision before September 29. The decision was a result of the fact that the Board failed to reach agreement about the company’s future governance. The Disciplinary Committee found that Wedins had contravened the listing agreement by not immediately disclosing the information about the general shareholders’ meeting. According to the regulations of the Exchange and Clearing Operations Act, a listed company may delay disclosure of price-sensitive information if there are reasons for doing so. If the company makes such a decision, the listing agreement stipulates that the company must immediately inform the Exchange and have procedures in place that ensure that only those persons who require the information have access to it. In addition, the company must have the preparedness to disclose the information in the event that it nevertheless leaks out. On October 13, 2005, it was reported in the Board of Directors of Wedins that FöreningsSparbanken had decided to shorten the repayment period for what is known as a seasonal credit of SEK 40 million. Since the bank’s decision was part of an ongoing, non-concluded discussion about Wedins’ future financing, the company chose not to disclose the information about the seasonal credit. However, information about this decision was not sent to the Exchange. On October 18, 2005, the daily newspaper Svenska Dagbladet published an article containing detailed information about the bank’s decision concerning the seasonal credit. The article did not result in Wedins taking any action. The Disciplinary Committee has concluded that, in view of the situation in which Wedins found itself during autumn 2005, the information about the seasonal credit was of a price-sensitive nature but that the company was entitled to postpone disclosure of the bank’s decision. However, the Committee found that the company had contravened the listing agreement by not immediately informing the Exchange about the postponement and by not immediately disclosing any information when the details about the bank’s decision had leaked out. The Disciplinary Committee fined the company SEK 576,000, equivalent to three annual fees.