On Bank of Russia instructions on preventing violations with regard to exposed illegal use of insider information

The Bank of Russia in information cooperation with foreign regulators exposed illegal use of insider information of the open joint-stock company Open Investments (OJSC OPIN) and ONEXIM HOLDINGS LIMITED in February 2012.

In February 2012, ONEXIM HOLDINGS LIMITED took a decision to work out a mandatory offer to acquire ordinary registered uncertified shares of OJSC OPIN. This was insider information of both OJSC OPIN and ONEXIM HOLDINGS LIMITED until it was submitted to the FFMS of Russia in March 2012.

Bank of Russia monitoring established that S.S. Gorskiy, a representative (as of the date of the events) of ONEXIM HOLDINGS LIMITED, disclosed the insider information on the projected offer to ARDELICA LTD. Thus, S.S. Gorskiy violated the regulation of Clause 2 of Part 1 of Article 6 of Federal Law No. 224-FZ, dated 24 July 2010, ‘On Countering the Illegitimate Use of Insider Information and Market Manipulation and on Amending Certain Laws of the Russian Federation’ (hereinafter, Law No. 224-FZ).

In February 2012, ARDELICA LTD used the insider information to carry out transactions to acquire shares of OJSC OPIN at CJSC MICEX SE. The shares were accumulated by FOESTA LIMITED, also represented by S.S. Gorskiy. The ultimate beneficiary was ONEXIM HOLDINGS LIMITED. With these actions ARDELICA LTD, FOESTA LIMITED and ONEXIM HOLDINGS LIMITED violated the ban stipulated in Clause 1 of Part 1 of Article 6 of Law No. 224-FZ.

These operations are supposed to be aimed at earning profit by ONEXIM HOLDINGS LIMITED from acquisition of shares of OJSC OPIN prior to providing its shareholders with the mandatory price offer excluding acquisition premium.

Guided by Clause 5 of Part 1 of Article 14 of Law No. 224-FZ, the Bank of Russia sent instructions on avoiding similar violations in the future to ONEXIM HOLDINGS LIMITED, ARDELICA LTD, FOESTA LIMITED, and S.S. Gorskiy.

Information on sending this instruction is subject to obligatory disclosure in compliance with Clause 1 of Part 1 of Article 15 of Law No. 224-FZ.

The attention is also drawn to the fact that insider information trading is criminally liable from August 2013. Thus, the Bank of Russia has no grounds for submitting the monitoring materials to law-enforcement agencies for initiation of a criminal case. However, the stated facts established by the Bank of Russia when exercising its supervisory authorities and reflected in the above-mentioned instructions can be used for business reputation assessment of the related parties.

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