EQT Partners AB updates
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Swedish regulators have launched a market abuse investigation by private equity group EQT following a controversial $ 2.7 billion sale of top executives.
Shares in EQT fell 6 percent on Friday morning after Finansinspektionen sa it investigated whether one of Europe’s largest private equity groups had violated market abuse rules by not disclosing inside information immediately.
Several EQT shareholders have expressed anger over the decision by partners in the private equity firm to sell $ 2.7 billion a year earlier than stated in a lock-up agreement.
EQT announced this month that existing and former partners, including Chairman and Founder Conni Jonsson and CEO Christian Sinding, would sell 63 million shares in the Group, representing approximately 6 percent of total capital and 11 percent of senior executives’ holdings.
According to the lock-up agreement from EQT’s listing in 2019, these shares would not be sold until September 2022. But the Stockholm-based company sa on September 7 that the shares would be sold, which increases the liquidity of the share.
“We think it is critical that the market can rely on commitments that are made, for example when a company makes a stock exchange listing,” says Sverre Linton, General Counsel for the Swedish Shareholders’ Association, to the Financial Times. “There should be no doubt about the potential investor whether a commitment to a lock-up is sound or not, and you do not need to be a trained lawyer or financial expert to be able to find out for yourself.”
The EQT also said on September 7 that a further 8 percent of the share capital would be released from lock-up in 2023 with the remaining partners’ shares unlocked between 2024 and 2028. Partners must commit to reinvesting half of the proceeds from any sale of shares to EQT funds. added the company.
The private equity group, which has approximately EUR 71 billion in assets under management and whose main owner is the Wallenberg family’s investment vehicle, informed Swedish supervisory authorities on 7 September of a “postponed publication of inside information”. Finansinspektionen asked for more information a week later and based on that has now launched an investigation.
Jonsson then justified the sale of shares as helping to strengthen EQT’s shareholder base and improve liquidity. He added: “It is also about further protecting EQT further. The company will benefit from more solid governance, a stronger balance of interests and a broader ownership base. ”
Norway’s $ 1.4 million oil fund, one of the largest external investors in EQT, voted against Jonsson was re-elected at this year’s annual meeting and claimed that he was not independent and that “board decisions that are particularly vulnerable to conflicts of interest should have additional protective measures”.
EQT said on Friday that they remained in dialogue with Finansinspektionen and that they still believed that they had “handled the time to announce the inside information correctly. . . Now it is important to let the process run its course. ”