Elektrobit Group Oyj - PUBLIC REPRIMAND BY THE FINANCIAL SUPERVISION AUTHORITY
September 21, 2007
PUBLIC REPRIMAND BY THE FINANCIAL SUPERVISION AUTHORITY
STOCK EXCHANGE RELEASE
Free for publication on September 21, 2007 at 9.30 am. (EEST)
PUBLIC REPRIMAND BY THE FINANCIAL SUPERVISION AUTHORITY
Elektrobit Corporation (EB) has today been notified of the following decision by the Financial Supervision Authority (unofficial translation from the Finnish original):
"THE FINANCIAL SUPERVISION ISSUED A PUBLIC REPRIMAND TO ELEKTROBIT FOR FAILING TO COMPLY WITH DISCLOSURE OBLIGATION
The Financial Supervision Authority has on 21 September 2007 issued a public reprimand to Elektrobit Corporation for failing to comply with the disclosure obligation set forth in Chapter 2, Section 7 of the Securities Market Act. The company failed to disclose without undue delay its decision to withdraw from the original design with partnered manufacturing business model in 3G smartphones, which was one of the models used to implement the strategy of the company's Cellular Mobile Terminal business area.
According to the Financial Supervision, the decision to withdraw from said business model was information that had a material effect on the value of the company's security. The Financial Supervision considers that the obligation to disclose the information was triggered on 30 November 2006 at the latest, when the CEO of the company informed the company's Board of Directors of the withdrawal decision. The company did not disclose the information until in its financial bulletin on 7 February 2007.
According to the Financial Supervision, the earlier coherent disclosure in the company's stock exchange and press releases of the manufacturing of smartphones by using the original design with partnered manufacturing business model and of the contracts related to the project seem to indicate that also the company has considered the issue as material. The materiality is also supported by market reactions. The decision to withdraw from the business model should have been disclosed by means of a separate stock exchange release on 30 November 2006 at the latest. Elektrobit has thus violated the regulations and its conduct has, in the Financial Supervision's view, been at the least negligent. However, when judged as a whole, the matter does not give rise to more severe measures than a public reprimand.
Elektrobit has given the reports requested by the Financial Supervision on 29 March 2007 and on 15 August 2007, respectively.
According to the preamble of Chapter 2, Section 7 of the Securities Market Act, an issuer shall itself assess the possible impact of different decisions and matters on the value of its security. The starting point in the assessment is to consider whether it can be assumed that a reasonable investor acting on the market would take such information into account when making an investment decision. When considering the decision to disclose attention shall also be paid to the overall coherence of the company's public disclosure. The
assessment of the materiality of the information can thus be influenced also by the information previously disclosed by the issuer. A change in any material matter shall be disclosed to the public in a similar manner as the original information.
The Financial Supervision Authority may issue a public reprimand to an undertaking operating on the financial markets that wilfully or negligently violates the provisions governing financial markets or the regulations issued there under where the matter, when judged as a whole, does not give rise to more severe measures.
The public reprimand has not yet gained legal force. Elektrobit may appeal the decision given on 21 September 2007 to the Market Court within 30 days of having been notified of the decision.
THE FINANCIAL SUPERVISION AUTHORITY"
Elektrobit Corporation has a different view on the matter of the reprimand and believes to have acted diligently in the matter. The company has made a severe internal investigation of the matter and given the answers requested in the matter to the Financial Supervision. The company abides by the decision.
21 September 2007
Elektrobit Corporation
The Board of Directors
FURTHER INFORMATION:
JT Bergqvist
Chairman of the Board of Directors
Tel. +358 40 344 5148
Susanna Marklund
Director, IR and Press Relations
Tel. +358 40 344 5321
Päivi Vasankari
Chief Legal Officer
Tel. +358 40 344 2794
DISTRIBUTION:
OMX Helsinki
Principal media
Elektrobit Corporation, EB
EB creates advanced technology and turns it into enriching end-user experiences. EB is specialized in demanding embedded software and hardware solutions for automotive and wireless technologies. The net sales for the year 2006 totalled MEUR 181.5. Elektrobit Corporation is listed on OMX Helsinki.
www.elektrobit.com
