The Disciplinary Committee of NASDAQ OMX Helsinki (the “Exchange”) has imposed a public warning and a fine of EUR 100,000 to Rautaruukki Corporation (trading code: RTRKS) due to the breach of the Rules of the Stock Exchange (the “Rules”). In August and September 2013 the company did not provide the Market Surveillance of the Exchange the necessary information required by the the Rules. Furthermore, the company breached the obligation to maintain adequate administrative procedures required by the Rules.
Rautaruukki Corporation disclosed a company announcement on January 22, 2014, stating “SSAB and Rautaruukki to combine through SSAB making a recommended share exchange offer to Rautaruukki’s shareholders”. Rautaruukki had been negotiating to combine the steel businesses with SSAB already since November 2011. Rautaruukki had established a project-specific insider register at that time. After several phases the negotiations led into the disclosure of the plan in January 2014 to combine the two companies through a public share exchange offer.
There were unexceptional patterns in the trading of Rautaruukki share in August and September 2013. The price and the trading volumes of the company’s share rose several times remarkably. The Market Surveillance of the Exchange contacted the company multiple times during August and September 2013 and requested for information of possible reasons for the unusual price movements of the company share. All concerns if the company had possible ongoing significant projects or undisclosured information were denied by the key contact persons.
According to the Exchange Rule 8.1.1 (as of July 1, 2013, currently the Rule 9.1.1), the Exchange is required to provide sufficient and reliable surveillance in the market to avoid and detect any malpractice activities and in order to promote public trust. According to the Rule 8.1.2. (as of July 1, 2013, currently the Rule 9.1.2), the responsibility of the listed company is to cooperate and provide any information required by the Market Surveillance of the Exchange. The breach to comply may hinder proper market surveillance and affect possible investigations.
The Disciplinary Committee stated that Rautaruukki Corporation as a listed company is responsible to cooperate with the Exchange. The administration is not organized in an adequate manner if a person nominated to be a contact person for the Exchange is not aware of the company’s current specific projects. Furthermore, to comply with the requirement of the adequate administration, it is necessary that the role of the Exchange as a supervisor of the trading is clear to the listed company.
The Disciplinary Committee states in its resolution that Rautaruukki Corporation has breached the Rules 8.1.2 (as of July 1, 2013) and 220.127.116.11 regarding its obligation to provide information to the Exchange for surveillance purposes as well as the related obligation to maintain adequate administrative procedures. Taking into the consideration the size of the transaction and the effects to the market surveillance, the breach is considered to be serious. Based on the Rule 8.2.3 (currently 9.2.3), the Disciplinary Committee imposed a warning and a fine of EUR 100,000 to Rautaruukki Corporation. The main argumentation and the resolution statement shall be disclosed by the Exchange.