The group of small shareholders of the Simo Milošević Institute, gathered in the Montenegrin Association of Small Shareholders (CAMA), believes that the part of the Institute's Restructuring Plan relating to the planned share buyback is not applicable and violates several regulations governing the capital market, which is why they call on the Government and shareholders with significant participation to reconsider the entire process and come up with a fair proposal.
"On the occasion of the adopted Restructuring Plan of the "Dr Simo Milošević" Institute, and after a detailed analysis by our team, we are publicly presenting the findings regarding minority shareholders, which indicate a violation of corporate practices and potentially regulations governing the capital market:
1. The Restructuring Plan thus created, as a document containing elements of the future actions of the majority shareholder and its intention to purchase the shares of minority shareholders in a proclaimed manner, is not only contradictory in some parts, but also non-immanent to corporate practice and as such should not have been the subject of a parliamentary decision, but is a document that can only be considered at the Government level and cannot have a binding effect on all shareholders.
2. The government and a shareholder with a significant stake have de facto made an agreement on joint action, whereby both parties communicate publicly unaware that they are violating several regulations governing the capital market. By doing so, consciously or unconsciously, they are putting other, minority shareholders at a disadvantage, despite claims that they want a partnership and fair relationship, and this is primarily reflected in the intention to buy their shares at a price that is over 60% lower than the price at which they will then acquire new shares through recapitalization.
3. The price to be offered to minority shareholders was determined on the basis of the previously expressed willingness of shareholders with significant participation to sell their shares at a price of 58,14 euros. This method of assessing the so-called fair value is completely unknown to the profession, and it is indicative that it was not decided to apply the book value or discounted cash flow method. In addition, this method of determining the price is accompanied by the illogicality that at the time of the publication of the Plan, the order to which its authors refer did not even exist in the trading system. On the contrary, the shareholder with significant participation not only did not sell the shares, but continued to buy them at the stated price with a publicly downgraded intention to acquire shares at 154 euros in the upcoming recapitalization. The two parties are again unaware, even in the event that this was not their intention, and that the situation arose as a result of a combination of circumstances, that all of the above can be considered price manipulation within the meaning of the Capital Market Law.
4. So the Government, instead of offering a fair price for the takeover to the shareholders, who are predominantly citizens of this country, by the nature of things, is offering a price that was determined in a controversial manner, namely on the basis of a sales order that was converted into a purchase order.
5. In the takeover process, the Institute's management bodies must, in accordance with the Law, declare the wrong price. We are already asking them to say whether the price of 58,14 euros represents the fair value of the shares? If the answer is affirmative, does this mean that the state and other persons participating in the recapitalization will acquire shares at three times the actual value and thereby cause damage to themselves? In the case of a negative answer, does this represent a public admission of the existence of an intention to harm small shareholders?", stated the CAMA statement.
They, as they state, in good faith call on the Government and the shareholder with a significant stake to "once again consider the entire process and come up with a fair proposal towards the shareholders who are mostly citizens of Montenegro and justify the trust they received in the Government's case, and the good business reputation in the case of the shareholder with a significant stake."
"We would like to emphasize that we are issuing this statement solely with the intention of protecting our interests and pointing out illogicalities and potential violations of the law, which can still be prevented, and it also has no political or other background. In order to avoid the situation where various individuals label us as enemies of the state and the company, which has happened in similar situations, despite the fact that time has confirmed the accuracy of our statements, we publicly support activities that will lead to the survival of the Institute in a fair and legal manner, as an important link in the healthcare and economic system of Montenegro," the association announced.
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