The Montenegrin Association of Small Shareholders (CAMA) reported to the Commission for the Capital Market the CEO of Luka Bar, Zarija Franović, because, as they claim, he presented manipulative data in the media, which led to a 20 percent increase in the price of shares of the Bar company on the stock market, during two weeks.
Responding to the accusations, Franović told "Vijesti" that "in all public addresses he presents only and exclusively facts, true and easily verifiable".
CAMA calls for the reaction of the authorities, especially the Commission, as well as the Board of Directors and the Government, as the majority owner.
"There are strong indications that on this occasion, contrary to the prohibition from Article 138 of the Capital Market Law, Franović provided the public with misleading and incomplete information regarding the company's operations with the aim of artificially boosting the share price of this company, and that as a responsible person of the company, knew, or should have known, that the information was incomplete and misleading," claims the application to the Commission signed by CAMA director Aleksandar Raspopović.
Franović points out that he sees nothing controversial in the fact that the data on the successful operation of Luka caused a jump in shares on the stock market.
"On the contrary, I wonder what would be the reaction of small shareholders if there was a fall in shares on the stock market? There is constant investment in the Port of Bar, business is at an enviable level, the company is financially stable and liquid. The only thing that remains unclear is whether it is necessary for the executive director to request permission from the minority shareholders to give an interview," says Franović.
CAMA indicates that after Franović's statement that Luka Bar made a profit of 600.000 euros in half a year, and that June was extremely successful, i.e. a record in terms of transshipment of goods, on the Montenegro Stock Exchange, the company's shares rose by about 20 percent in just a few weeks.
"The Executive Director of the Port consciously states that the result from business was due to the increase in transshipment of certain categories of cargo (cement, alumina, tailings, scrap iron, petroleum coke, etc.). However, it does not state what happens to the main category of transhipment ie. with the transshipment of bauxite, whose share in the total transshipment for 2017 is 54 percent. He did not say the share of this category in the total transshipment, nor did he state that due to the situation with the exploitation of bauxite there was a significant drop in the transshipment of this type of goods. It doesn't even state how much that drop was," the application to the Commission points out.
CAMA adds that on the company's website, the management published information that June was extremely successful for the company, according to all financial and natural business indicators.
"We believe that the management knowingly stated this information, without stating whether there was a decline or growth in business in April and May, months after the last financial report was published, and whether this growth in June was the result of business (in)activity in April and May," the application adds.
Franović answers that not only on a monthly basis, but whenever they consider it expedient and justified, they issue press releases showing the results of operations.
"I responsibly claim that the Port of Bar has never operated more transparently and that more attention has never been paid to relations with the public. That was the case in April, May and June - every month we informed about port activities, which are really many and all of them are successful", says Franović. He adds that the share of bauxite in the total transshipment has decreased this year, but the growth of other goods is evident.
He reminds that he previously told the media that new goods and cargoes are arriving in the Port of Bar, and other subjects of the maritime industry benefit from this vision, such as Crnogorska plovidba, whose ship "21.maj" delivered petrolcoke to Montenegro for the first time.
"Also, cement is a commodity that has seen a respectable increase in transshipments in recent months. This does not mean that we give up working with bauxite, on the contrary. The company Uniprom is our very important partner and will be in the future thanks to new jobs and projects depending on the issue of the concession that does not depend on the Port of Bar", stated Franović.
The small shareholders remind that the management of the port and the union of the company signed an agreement according to which the workers will be paid a net amount of 2,36 million (with taxes and contributions of 3,73 million), and in the name of the difference in the calculation of wages over a period of six and a half years .
As they add, Franović did not specify how much, on that basis, claims should be reduced for the first half of the year.
Franović answers that 210 workers have been paid so far, who received 940.000 euros net or 1.573.000 euros in gross amount.
"In the following days, another 44 workers will be paid, the net amount of the payment is 216.204 euros or gross 362.000 euros. Therefore, a total of 254 workers will be paid, in the amount of 1.153.658 euros net or 1.949.682 euros gross, of which the state will earn 796.024. Also, revenues will be generated by the Municipality of Bar through the personal income tax and the surtax on the personal income tax. All the money paid out so far is from current business. "The company is still highly liquid and stable, all liabilities and claims are settled properly," concluded Franović.
Where does the profit come from when costs are rising
CAMA asks how the Port achieved 600 euros in profit with a significant increase in costs. "If we consider that the Port has around EUR 10,70 million in operating income, that at the quarterly level this figure is approximately 25 percent of the total income, that the expenses should be increased for the mentioned reservations, then we clearly come to the conclusion that only through manipulations in the balance sheets possible to achieve a positive result in just three months, bearing in mind all the mentioned facts and the loss of 78.000 from the first quarter. All this requires a detailed analysis by the Commission for the Capital Market, which should deal with manipulations that affect the share price on the stock market, it requires a reaction from the Board... Finally, a reaction from the Government as the majority shareholder is also needed, which, we are convinced, has enough capable people to propose for the management of the Port, and to ensure the normal and law-based operation of this important economic resource with a proactive approach," the application states.
Bonus video:
