The Iceland Stock Exchange (ICEX) has decided to issue
a public reprimand to Hekla hf. due to a violation of ICEX´s Rules. ICEX is of the opinion that Hekla has
violated Sections 4.3.1, 4.3.4 and 4.3.6 of the Rules for Issuers of Securities
Listed on the Iceland Stock Exchange Ltd. The circumstances of the case are
that on 31 August of this year, Hekla hf. published its interim financial
statements for the six months ending June 2005 in the ICEX News System. The
Notes to the interim financial statements were lacking, although the auditor’s
endorsement stated that Notes had been included in the interim statements. It
was stated in the Report from the Board of Directors and the CEO that the
interim financial statements had been prepared in accordance with the Financial
Statements Act and the Regulation on the Presentation and Contents of Financial
Statements and Consolidated Financial Statements. Following several reminders
from ICEX the interim financial statements, together with Notes, were published
on 13 September. That same day ICEX made a written request for an explanation
as to why the company did not include the Notes when submitting its interim
financial statements for publication in the ICEX News System on 31 August this
year, as provided for by Sections 4.3.1, 4.3.4 and 4.3.6 of the Rules for
Issuers of Securities Listed on the Iceland Stock Exchange. A reply was received from Hekla hf. on 21 September.
Hekla hf. is an issuer of bonds listed on ICEX and as
such is required to comply with ICEX's Rules concerning information disclosure. ICEX is of the opinion that Hekla hf.
should have sent the Notes accompanying its interim financial statements when
they were submitted for publication in the ICEX News System on 31 August this
year. Section 4.3.1 states that an issuer
shall publish the results of its 6M interim financial statements no later than
two months following the conclusion of the reporting period. According to Section 4.3.4, an issuer must make a news
announcement concerning statements and according to Section 4.3.6 the 6M
interim financial statements are to be accompanied by a news announcement.
Hekla hf. must be regarded as having failed to
fulfil its obligation to publish its 6M interim financial statements no later
than two months following the conclusion of the reporting period, since the
Notes accompanying the statements were lacking and the company is thus not
regarded as having fulfilled its obligation until 13 September, when the
interim statements were published complete with the Notes.
It should also be borne in mind in this instance that
the Notes were missing from the company’s annual financial statements published
16 February of this year; two days later the annual financial statements were
published complete with Notes following reminders from ICEX. On that occasion it was pointed out to
the company that the Notes were to be included when the news announcement was
sent for publication, that ICEX was not authorised to grant exceptions from the
publication of the Notes to its annual financial statements, and that Act No.
144/1994, on Annual Financial Statements,
requires Notes to accompany annual financial statements.
The decision to issue a public reprimand has been taken
on the basis of the contract concluded between Hekla hf. and ICEX upon the
listing of the latter’s bonds on ICEX, cf. Section 7.3 of the Rules for Issuers of
Securities Listed on the Iceland Stock Exchange Ltd., which states, inter
alia, that in cases of violations of ICEX Rules, ICEX may issue a public
statement concerning the matter in question.