A case begins today in the Eastern High Court that could prove extremely costly for the jewellery giant Pandora, one of Denmark’s fastest-growing listed companies. It is accused of withholding market-sensitive information and could face millions in fines, DR reports.
The company was convicted last year at Glostrup City Court of withholding information in 2011 and was fined 2 million kroner. It appealed against the verdict, thus leading to the current appearance.
The city court found that Pandora’s management took 15 days too long before announcing poor sales figures, resulting in shareholders buying shares at artificially high prices during that period.
As well as a potential fine, the company could face lawsuits from shareholders following a verdict against it at the high court.
“I will be watching the high court case keenly. If Pandora also loses this case, then I will sue Pandora along with a number of other shareholders,” Ole Reinbach, a former Pandora shareholder, told DR.
Reinbach lost about 120,000 kroner buying Pandora shares before they fell 65 percent as a result of downgrading its figures.
Consequences for other companies
Paul Krüger Andersen, a stock market law expert at Aarhus University, said that the verdict of the case could set a precedent for other companies in the future.
“The judges should assess how concrete knowledge should be before a stock market notice is sent out,” he said.
“On the one hand there is the consideration that the management should have time to analyse new knowledge properly. The other consideration is that the market and shareholders are entitled to immediately, or as soon as possible, get a stock market notice about internal information that can affect the share price.”