• POL FSA published its Jul. 14, 2022 decision to fine Wojciech Babinski PLN 7,130,000 for 13 violations of obligation to notify change after sale of shares in a company.

Disclosure Breaches

• Babinski was the majority shareholder of the company, from its establishment, and during the period of transactions in question, he was management board president.
• From 10 July 2020 - 25 September 2020, Babinski reduced his shares in the company.
• As a result of the transactions, his ownership of the company shares decreased from 59.06% to 2.36% of votes in the total number of votes in the company.
• Babinski did not fulfil his obligation to immediately notify about the changes.
• Market participants were therefore not aware within the statutory deadline about reducing their involvement in the company's shares; and Babinski violated art. 69 of the act of 29 July 2005 on public offering, conditions governing the introduction of financial instruments to organized trading, and public companies thirteen times.
• These violations concerned significant thresholds, i.e. 50%, 33.33%, 33%, 20%, 5%.
• And concerned changes of at least 1% above 33%, and related to the withdrawal of the company's president from involvement in its shareholding structure.

Capital Market Transparency

• Art. 69 of the act on public offering requires disclosure of holdings of significant blocks of shares by shareholders, to ensure maximum company shareholder transparency.
• Law allows market participants to track changes in major investor involvement in the shareholding structure of a public company, per capital market transparency principle.
• Capital markets cannot function well without the principle of transparency.
• POL FSA highlighted the importance of other entities being aware of Babinski's infringements, so they realize the unprofitability of committing violations of the law.
• It is an incentive for other participants of the capital market to exercise due diligence in the performance of statutory obligations, and strengthens trust in State institutions.

Further Breaches

• On 9 June 2022, POL FSA separately fined Babinski PLN 1,950,000 for breach of disclosure obligations regarding transactions on own account on company shares from 10 July 2020 - 4August 2020 - a period partially overlapping the 14 July decision.
• The 9 June 2022 is not final.