MNB fines OTT-ONE HUF 111 mln over market manipulation
The National Bank of Hungary (MNB) on Monday said it fined listed IT company OTT-ONE HUF 111 million over market manipulation and infringement of the rules on the immediate disclosure of insider information and the rules on extraordinary disclosures, according to a report by state news wire MTI.
MNB earlier suspended trading in the issuer's shares; in order for trading to resume, the issuer must make the disclosures it failed to make earlier.
The central bank said it found in a target audit that in several cases the issuer failed to disclose extraordinary information that directly or indirectly affected its valuation and the value of its shares. The company also regularly made disclosures on transactions of significant value, giving the impression, contrary to reality, that it generated a substantial income or profit from these.
Furthermore, the disclosures about various cooperation agreements contained in some cases unsubstantiated, incomplete, or false information, according to the report. On the other hand, the issuer failed to disclose information contrary to its earlier disclosures, such as the fact that it did not actually carry out any activity based on certain contracts.
MNB said it fined OTT-ONE HUF 4.5 mln over infringements of the rules on extraordinary disclosures, HUF 22.5 mln over infringements of the rules on the immediate disclosure of insider information, and HUF 84 mln over violation of the rules prohibiting market manipulation. MNB considered it aggravating circumstances that the market manipulation affected a long period and that a significant part of the issuer's disclosures was affected by the infringements during the period under review.
Considering that the findings raise suspicion of the criminal offense of illegal market manipulation, MNB said it will file a complaint with the Budapest Chief Prosecutor's Office.
OTT-ONE earlier said it searched, unsuccessfully, for a replacement for its auditor for months, and finally found a person willing to take on the job in October.
The last earnings report OTT-ONE released, for Q1-Q3 2020, showed the company's revenue jumped 664% year-on-year to HUF 12.1 bln, lifted by a state order for ventilators and masks, but its net income rose at just a fraction of that pace to a modest HUF 41 mln. OTT-ONE said in the report that excluding revenue from the delivery of the healthcare equipment, turnover was little changed from the base period.
OTT-ONE informed investors of the MNB resolution on the fine in an announcement posted on the website of the Budapest Stock Exchange.
The company said in the announcement that it "disputes the validity of the findings" in the resolution and will contest it in the Budapest Metropolitan Court.
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