KNF fine for breach of disclosure obligations

Act of 29 July 2005 on the offer ….. provides for a FINANCIAL PENALTY in the event of improper performance by the company of INFORMATION OBLIGATIONS. This penalty may be imposed: (A) ON THE COMPANY and (B) when the breach of information obligations by the company is gross – also on the BOARD MEMBER.

KNF conducts separate proceedings against the company and against the board of directors. The question arises as to whether and to what extent the factual findings and legal assessment made by the KNF in the proceedings against the company are binding on a member of the board of directors. In the present case, the breach of information obligations consists in the INCORRECT UPDATING OF THE BUDGETS OF CONSTRUCTION CONTRACTS. If the budgets have been updated by the NEW MANAGEMENT BOARD: (1) EX POST AND (2) RELATED TO THE PREVIOUS FINANCIAL YEAR, this entails the responsibility of the DISMISSED BOARD for the alleged failure to update earlier.

The question therefore arises: Is the fact that the NEW Management Board and the new auditor approved the CORRECTION of the financial statements referred to the previous financial year sufficient evidence to consider that the financial statements were grossly incorrect (it was, after all, also examined by the auditor). A pattern of complaint to the NSA with an analysis of the issues attached.