The Finnish Financial Supervisory Authority (FFSA) has ordered Danko Koncar, the COO of and main shareholder in London-listed Afarak Group, to pay the Finnish government a €110-million fine.
The authority in February 2018 ordered Koncar to launch a takeover bid for Afarak’s shares, claiming that he and entities controlled by him had acted together to exercise control over the specialty alloys producer, and imposed a running conditional fine to enforce that ruling.
The initial fine was for €40-million and Koncar failed to launch a takeover bid for Afarak’s shares.
Eleven supplementary amounts have accrued since, taking the total to €110-million.
Koncar, who was previously also a CEO of Afarak, has applied to the Supreme Administrative Court in Finland for permission to appeal the initial FFSA order.
He now also has the right to appeal to the Helsinki Administrative Court, within 30 days, to have the latest FFSA ruling overturned.
“Koncar's failure to comply with the provisions on the obligation to launch a bid has served to undermine confidence in the securities markets,” the FFSA stated in its latest ruling.
Earlier this month, the Regional State Administrative Agency of Southern Finland had ordered audit firm Idman Vilån Grant Thornton Oy, with Chartered Accountant Jussi Savio as principal auditor, to conduct a special audit of Afarak’s administration and accounts for various financial periods.
Minority shareholders had requested the special audit.
The agency said it found that the application had included weighty reasons for reviewing the regularity of transactions made with all companies potentially belonging to the immediate circle of shareholders and Koncar.
The audit firm will conduct a special audit of Afarak’s accounts for the financial periods from January 1 to December 31, 2015; January 1 to December 31, 2016; and January 1 to December 31, 2017; as well as for the period from January 1 to April 30, 2018, to clarify the business and legal transactions conducted by Koncar with his probable immediate circle.
Afarak has also, this month, taken the decision to idle the two submerged arc furnaces at its Mogale Alloys processing facility, in Krugersdorp, South Africa, as a result of a difficult business environment and the irregular availability and high cost of electricity in the country.Creamer Media Senior Deputy Editor Online