VIPsight - 1st Edition 2019
COMPANIES
Wirecard AG: BaFin prohibits Short Positions in shares of Wirecard
On February 18th, 2019, BaFin issued a general administrative act prohibiting the establishment of net short positions and the increase in existing net short positions in shares of Wirecard. The act applies until April 19th, 2019.
The act is considered to be a measure under Art. 20 of the EU Short Selling Regulation, which applies in circumstances where there are adverse events or developments which constitute a serious threat to the financial stability or market confidence in Germany or in one or more other Member States, and the measure is necessary to address the threat. According to BaFin, events related to negative reports about Wirecard in the press resulted in uncertainty in the market, particularly with regard to the appropriate price determination for shares of Wirecard. BaFin also sees a risk that this uncertainty will increase and escalate into general market uncertainty.
METRO AG: Good-bye to Luxembourg
METRO AG has decided to delist its shares from the official list of the Luxembourg Stock Exchange and to remove the shares from trading on the regulated market of the Luxembourg Stock Exchange with effect from March 1st, 2019.
In light of the low volume of METRO Shares being traded on the Luxembourg Stock Exchange since the listing of the METRO Shares in July 2017, METRO AG considered according to a news release that maintaining an admission to trading on the Luxembourg Stock Exchange offers no benefits to the shareholders and investors. This holds true in particular since all METRO Shares will continue to be listed going forward on the Prime Standard of the Frankfurt Stock Exchange. In addition to that concentrating trading admissions to the Frankfurt Stock Exchange will allow METRO AG to focus on one regulatory regime according to the release.
Deutsche Bank AG: BaFin expands special Representative´s Mandate
As a measure to prevent money laundering and terrorist financing, BaFin ordered on February 15th that Deutsche Bank review its group-wide risk management process in the area of correspondence banking and adjust them where necessary.
In order to monitor the implementation of this measure, BaFin has expanded the mandate of the special representative appointed in an official notice. The special representative is to report on and assess the progress of the implementation.
Volkswagen AG: Enough Problems and to spare
According to an article in the German magazine SPIEGEL, Volkswagen has filed a self-report about faulty fuel consumption of the sports car model Porsche 911 (construction years 2016 and 2017) with KBA in January. According to the article, VW also wants to inform the US authorities EPA and CARB.
Further information as regards why the cars consume more gas and therefore emit more carbon dioxide than noted in the type approval was not available. However, tellerreport.com refers to a statement by the Volkswagen subsidiary Porsche: "Porsche has identified issues relating to individual so-called coasting tests during internal investigations, which are used to determine vehicle-specific values for chassis dynamometer tests, in this case, deviations in the determination of wind resistance values The facts are still under investigation, but it is a matter of course for Porsche, as a matter of course and an expression of its corporate culture, to actively inform the competent authorities and the company continues its internal investigations in close consultation with the authorities ."
Symrise AG: Distinguished Sustainability Management
For the sixth time in a row, Symrise AG has achieved Gold status with the sustainability rating agency EcoVadis. According to the rating, the company´s ecological, social and ethical responsibility is exemplary. EcoVadis uses 21 environmental, social, ethical and sustainability criteria in the supply chain to compare the performance of companies in different sectors. On this basis, the integration of essential sustainability criteria into the strategy, business model and management system can be evaluated comprehensively and systematically.
Wirecard AG: Turbulent Times in Singapore
Wirecard´s shareholders had a turbulent start in 2019. Following a steep share price increase since the beginning of the year, the share price started to tumble on January 30th amid a critical report published in the Financial Times referring to activities in the company´s Singapore office, and further information published at the beginning of February.
The company reacted with strong statements, stressing that “Wirecard notes the recent inaccurate, misleading and defamatory media coverage by the Financial Times”, and that “no material compliance findings as to the governance and accounting practices … have resulted from our continuous internal and external audit services.” Furthermore, the company pointed out that before the publication of the article there had been increased short activities on the capital market side.
According to the article, an external law form commissioned by Wirecard prepared a preliminary report, which included the information that it “found evidence indicating “serious offences of forgery and/or falsification of accounts””. This document is supposed to have been the basis for an internal presentation to Wirecard´s most senior management on May 8, 2018.
Wirecard responded to the allegations in detail, highlighting several conspicuous features. Also, the shares have been subject to short attacks in the past. Hence, it is no surprise that some investors preferred to realize profits and step aside for a while.
Südzucker AG: Late Effects of the Deregulation of the European Sugar Market
Amidst the background of a difficult market environment shaped by a historically low European sugar price level, Südzucker AG prepared a restructuring plan for its sugar segment. The plan contemplates - besides general cost reduction measures in the administration – capacity adaptations that could lead to factory closures with a reduction of the sugar production volume of up to 700,000 tons p.a. in order to streamline the capacities more alongside the European market demand.
The regulation of the European sugar market created market massive imbalances, and it is not clear yet when and at which level the market correction phase will end. Therefore, it should not come as a surprise that the necessary adjustments on the production level following the deregulation are a painful experience.