18.03.2016, 23:58
On Establishing Fact of Manipulating Markets of Investment Units
OREANDA-NEWS. The Bank of Russia has established the fact of manipulating the markets of investment units of Native Vasts closed-end real estate unit investment fund (hereinafter, the Fund, Investment Units) managed by AK Bars Capital, Ltd. and bonds of LLC Rotor (4-03-36052-R), LLC Zhilstroy (4-02-36238-R), LLC STP (4-01-28061-R) (hereinafter, jointly - the Bonds) effected at trading held by the closed joint-stock company Moscow Exchange (hereinafter, the Exchange) from January 2013 through April 2015 by the following entities and individuals: LLC Rotor, LLC Zhilstroy, LLC AVK, LLC Permtransmekhanizatsiya, LLC TSK-1, LLC Rentek, PJSC Promakriv as well as P. V. Romanova and N. A. Ivanov.
The examination revealed that all the above-mentioned organisations and also JSC non-governmental pension fund Strategy are interrelated and form a group of legal entities - the Strategy corporate group controlled by several individuals - ultimate stock/shareholders of the said organisations. Private individuals who took part in Investment Unit and Bond trading and hold different positions in organisations of the Strategy corporate group are either relatives or have occupational contacts.
Both the nature and mechanism of bidding to effect transactions with Investment Units and Bonds on the Exchange (often with identical price levels and volume), one and the same participants in the Investment Unit and Bond markets, furtherance of a gradual price rising (such tendency was very pronounced at the end of 2013 and 2014 fiscal years) indicate the above-mentioned persons were in agreement beforehand.
The revealed interrelations among the said persons show that the eagerness to artificially overprice the value of assets on the balance sheet of JSC non-governmental pension fund Strategy and to make the fund look like a successful company with profitable investments were one of the aims in manipulating Investment Unit and Bond markets. Such actions of the non-governmental pension fund Strategy point to the intention to mislead the investors and the regulator as regards the price and liquidity of the Investment Units and Bonds in order to reach the required ratios through placing by management companies pension funds and investing pension savings of the non-governmental pension fund Strategy in Investment Units and Bonds.
According to Clauses 2 and 6 of Part 1 of Article 5 of Federal Law No. 224-FZ, dated 27 July 2010, 'On Countering the Misuse of Insider Information and Market Manipulation and Amending Certain Laws of the Russian Federation' the agreed beforehand actions by LLC Rotor, LLC Zhilstroy, LLC AVK, LLC Permtransmekhanizatsiya, LLC TSK-1, LLC Rentek, PJSC Promakriv as well as P. V. Romanova and N. A. Ivanov which resulted in a substantial deviation in Investment Unit price, demand and offer, and Bond price are defined as a market manipulation.
The actions including those prescribed by the Administrative Offence Code of the Russian Federation were taken against the persons who participated in manipulating Investment Unit and Bond markets.
The corporate group Strategy also includes LLC Management Company Fraktal and LLC Management Company Magistral which manage pension funds and pensions savings of JSC non-governmental pension fund Strategy. The actions of the management companies were not always necessitated by the risk-oriented approach to the selection of the trading strategy and the investment objects as well as the protection of true interests of investors and participants of JSC non-governmental pension fund Strategy. A case was quite common when the transactions were made with no economic efficiency behind.
It seems while effecting trust management of the funds of the non-governmental pension fund Strategy the said management companies were guided mostly by the interests of the corporate group Strategy and its beneficiaries.
The examination revealed that all the above-mentioned organisations and also JSC non-governmental pension fund Strategy are interrelated and form a group of legal entities - the Strategy corporate group controlled by several individuals - ultimate stock/shareholders of the said organisations. Private individuals who took part in Investment Unit and Bond trading and hold different positions in organisations of the Strategy corporate group are either relatives or have occupational contacts.
Both the nature and mechanism of bidding to effect transactions with Investment Units and Bonds on the Exchange (often with identical price levels and volume), one and the same participants in the Investment Unit and Bond markets, furtherance of a gradual price rising (such tendency was very pronounced at the end of 2013 and 2014 fiscal years) indicate the above-mentioned persons were in agreement beforehand.
The revealed interrelations among the said persons show that the eagerness to artificially overprice the value of assets on the balance sheet of JSC non-governmental pension fund Strategy and to make the fund look like a successful company with profitable investments were one of the aims in manipulating Investment Unit and Bond markets. Such actions of the non-governmental pension fund Strategy point to the intention to mislead the investors and the regulator as regards the price and liquidity of the Investment Units and Bonds in order to reach the required ratios through placing by management companies pension funds and investing pension savings of the non-governmental pension fund Strategy in Investment Units and Bonds.
According to Clauses 2 and 6 of Part 1 of Article 5 of Federal Law No. 224-FZ, dated 27 July 2010, 'On Countering the Misuse of Insider Information and Market Manipulation and Amending Certain Laws of the Russian Federation' the agreed beforehand actions by LLC Rotor, LLC Zhilstroy, LLC AVK, LLC Permtransmekhanizatsiya, LLC TSK-1, LLC Rentek, PJSC Promakriv as well as P. V. Romanova and N. A. Ivanov which resulted in a substantial deviation in Investment Unit price, demand and offer, and Bond price are defined as a market manipulation.
The actions including those prescribed by the Administrative Offence Code of the Russian Federation were taken against the persons who participated in manipulating Investment Unit and Bond markets.
The corporate group Strategy also includes LLC Management Company Fraktal and LLC Management Company Magistral which manage pension funds and pensions savings of JSC non-governmental pension fund Strategy. The actions of the management companies were not always necessitated by the risk-oriented approach to the selection of the trading strategy and the investment objects as well as the protection of true interests of investors and participants of JSC non-governmental pension fund Strategy. A case was quite common when the transactions were made with no economic efficiency behind.
It seems while effecting trust management of the funds of the non-governmental pension fund Strategy the said management companies were guided mostly by the interests of the corporate group Strategy and its beneficiaries.
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