Hong Kong regulator fines bank over poor anti-money laundering, due diligence checks
January 5, 2021
The Financial Supervisory Authority (ASF) announced that it launched an investigation on “all aspects resulted following information that appeared in the public space about the investments private pension funds (Pillar II) made in Digi Communications shares”.
The regulator’s announcement came after prime minister Viorica Dancila’s economic advisor Darius Valcov, believed to be the Social Democratic Party’s economic mastermind, launched several allegations about the listing of local telecom group Digi Communications questioning the investments local pension funds made in the company.
Digi Communications listed its shares on the Bucharest Stock Exchange (BVB) in May 2017, when the company’s existing shareholders sold a 24% stake for EUR 210 million. Most of the local pension funds also invested in Digi shares, despite a corruption scandal involving some of the group’s officials that broke during the IPO period. Since the listing, the Digi shares lost about a third of their value.
Darius Valcov referred on several occasions to the Digi listing and the pension funds’ investments in the company as the Government spoke about the possibility to change the architecture of the pension system and cut contributions to private pension funds. The PM’s advisor also accused Digi of fraud and said the share price would continue to fall.
Digi Communications, which is controlled by local investor Zoltan Teszari, also owns Digi 24, one of the main news stations that has been criticizing the Government. The company rejected Valcov’s statements saying these were part of a defamation campaign against it.
Valcov suggested that Digi’s debts are higher than the group’s assets, which would translate into negative equity. However, according to Digi’s half-year report for 2018, the company had total assets of EUR 1.51 billion and total debts of EUR 1.36 billion, resulting in EUR 150 million equity.
“The politician has made a series of assertions that mislead and betray a lack of knowledge about the capital markets or a strategy to manipulate information and create confusion and mistrust in an investment sector,” the company said, adding that its gearing ratio was lower than the sector average in Europe.
The group’s representatives also mentioned that the EUR 2 billion investments made since 2010 have contributed to Romania having one of the highest internet speeds in the world.
Digi isn’t the only big company that Valcov has attacked lately. The PM’s advisor also referred to Austrian group OMV, in the context of the new offshore law, saying that Russian group Gazprom may be behind it. The allegations are contradicted however by public information.
Source: https://www.romania-insider.com/
