Translation. Region: Russian Federal
Source: Central Bank of Russia –
An important disclaimer is at the bottom of this article.
During the inspection, the Bank of Russia established facts of illegal use of insider information by Mikhail Vladimirovich Papkin when conducting transactions with ordinary shares of PJSC Ashinsky Metallurgical Plant (hereinafter referred to as the Shares, the Company).
On 12.08.2024, the decision of the Board of Directors of the Company to recommend to the General Meeting of Shareholders the payment of dividends in the amount of 77 rubles per Share from the net profit received based on the results of the first half of 2024 and the retained earnings of previous years was published on the website of the Central Research and Development Company 1 of the Interfax agency. This information was insider information of the Company.
Considering that dividends on the Shares had not been paid for over 20 years, this news provoked a sharp increase in the value of the Shares, in connection with which a discrete auction was held on the Shares on 12.08.2024.
Papkin M.V., being an insider and a member of the Board of Directors of the Company, participated in a meeting of the Board of Directors on 09.08.2024, at which issues of convening an extraordinary general meeting of shareholders and the amount of dividends were considered. On the day of the meeting, he made a series of transactions to purchase Shares. After the disclosure of insider information on the decision to recommend the payment of dividends on 12.08.2024, Papkin M.V. made a series of transactions from 13.08.2024 to 19.08.2024 to sell the acquired volume of Shares at a price significantly exceeding the purchase price, making a profit.
Thus, it was established that Papkin M.V. unlawfully used the Company’s insider information, in connection with which his actions were qualified by the Bank of Russia as a violation of the prohibition established by paragraph 1 of part 1 of article 6 of Federal Law No. 224-FZ.
Papkin M.V. was brought to administrative responsibility for the illegal use of insider information, and he was given an order to prevent similar violations in the future.
In addition, the Bank of Russia sent instructions to professional participants in the securities market and trade organizers to suspend operations on the brokerage accounts of M.V. Papkin.
The Bank of Russia draws attention to the inadmissibility of the unlawful use of insider information when making transactions by insiders of the issuer, as well as the need for issuers and other legal entities specified in Part 1 of Article 11 of Federal Law No. 224-FZ to properly fulfill their obligations in terms of taking measures to prevent, identify and suppress the unlawful use of insider information, including ensuring its protection and confidentiality.
1 Corporate Disclosure Center.
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