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Reference is made to Finanstilsynet’s (The Financial Supervisory Authority of Norway) preliminary decision and notice of violation charge of 11. May 2012, cf. the Norwegian Public Administration Act section 16, and the response dated 15. May 2012 from EOC Limited.
Pursuant to the Norwegian Securities Trading Act (STA) section 17-4 (2) may Finanstilsynet impose a violation charge if the deadline for publishing the annual report is violated, and this is due to negligence or willful misconduct.
According to Oslo Børs's NewsWeb, EOC Limited published its annual report for 2011 on 8. May 2012. As stated in the notice, the deadline for publication of the annual financial report is at the latest four months after the end of the financial year, cf. STA section 5-5 subsection (1). EOC Limited apply deviating financial year (1. September - 31. August).The annual report for 2011 should have been made public no later than 31. December 2011. Public disclosure must be undertaken in accordance with STA section 5-12, cf. the Securities Trading Regulations (STR) section 5-9. Finanstilsynet finds that the company has violated STA section 5-5 subsection (1).
In order for Finanstilsynet to impose a violation penalty, the violation must have been committed wilfully or through negligence. Finanstilsynet accordingly considers whether the violation was due to circumstances within the company’s control. EOC Limited is of the opinion that "the violation was not committed wilfully or through negligence, but was a genuine oversight on our part". Finanstilsynet emphasizes that listed companies are expected to exercise a high level of due care in fulfilling their obligations to the market. The difficulties described by the company were not of such a nature as to render a delay unavoidable. Finanstilsynet therefore finds that the company acted negligently.
STA section 17-4 (5) specify the criteria to be applied when fixing the amount of the violation charge. Pursuant to section 17-4 (5) when the size of a violation penalty is assessed "importance shall in particular be attached to the scale and effects of the violation as well as the degree of guilt found" Additional guidelines for assessment of the size of the violation charge are set out in "Guidelines- violation charge related to periodic financial reporting", published by Finanstilsynet on l0. June 2009. It appears from these guidelines that the size of the penalty shall be assets according to the market value of the company as of l. January 2011. The minimum violation penalty for all issuers of listed shares in 2011 was NOK 130,000. This is in line with the previous practice of Oslo Børs.
EOC Limited has comments to the measure of the amount of the penalty levied. The company is of the opinion that the penalty should be waived, as the report was made available to the shareholders by posting a downloadable softcopy of the report on the company's homepage on or before 30. December 2011 as well as mailing a hardcopy to every registered shareholder on 23. December 2011.
Finanstilsynet emphasizes that the obligations to disclose and store regulated information according to STA section 5-12 (1), cf. STR section 5-9 shall ensure access for both investors and potential investors. Public disclosure shall as far as possible take place simultaneously in Norway and other EEA countries. The information shall be made public via media that can reasonably be expected to ensure that the information reaches the general public across the entire EEA. The obligations do also ensure that the investors and potential investors get access to the regulated information at the same time. The steps taken by the company did not ensure this. Finanstilsynet also emphasizes the long delay.
In considering whether to make a decision on violation charge Finanstilsynet acknowledges that such charges are intrusive to the company concerned. The assessment of whether the charge should be imposed is thus an assessment of whether Finanstilsynet considers it necessary to provide a violation charge in the current case. Publication of periodic financial information is one of the fundamental duties listed companies are required in relation to the market. Accurate and timely financial information is crucial for market participants and investors' decisions, and thus rate trends in the stock. Finanstilsynet considers delayed reporting as a serious breach of clear fundamental obligations of listed companies. In the interest of a well-functioning market it is necessary to react in this case. Finanstilsynet also refers to administrative practices in similar cases.
Based on the above-mentioned and with legal basis in STA section 17-4 (2) and section 5-5 (1), Finanstilsynet has adopted the following individual decision:
EOC Limited has to pay a violation penalty of NOK 130 000- one hundred and thirty thousand kroner- which falls to the Treasury.
Pursuant to the Norwegian Public Administration Act section 28, Finanstilsynet's decision to impose a violation penalty may be appealed to the Ministry of Finance. The time limit for appeal is three weeks from the date of receipt of this letter.
An invoice will be sent to EOC Limited.
On behalf of Finanstilsynet
Anne Merethe Bellamy
Deputy Director General
Head of Section