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“CLR Inv. received illegally £136 mln”

14/07/2004 11:08
The Investigation Committee continued its task on Wednesday with a confidential report on CLR Investment Fund, which outlines the course of the Company and ends up with interesting conclusions, StockWatch revealed on Wednesday.

The Company has been accused for illegal collection of cash, illegal payment of commission and unilateral agreements. On the other hand, the CLR Investment Fund representative told StockWatch that “all acts were lawful”.

In its confidential report that had been submitted to the Legal Service few months ago, the Investigation Committee reported:

1. According to the Committee, the publication of an announcement that “is equivalent to a prospectus” on a daily newspaper (“Simerini” 14/12/1999) violates the Companies’ Law.
2. The Company has been accused for violating the Companies’ Law (late November 1999), when it “issued and circulated an application form for the acquisition of shares, before issuing the prospectus”.
3. “The collection of 136,216,499 pounds with the irrevocable applications was illegal”.
4. It is noted that the reference in the Prospectus for the allocation of 10 million shares was “misleading” and the Investigation Committee evoked the letter of the Company’s General Manager.
5. The investment management agreement with CLR Financial Services and the assignment of stockbrokers’ services to CLR Stockbrokers were “unilateral and were not agreed on a trading basis”. (It is noted that the underwriter of the CLR F.S issue held 98,68% of the Company’s issued capital).
6. According to the report, until May 22, 2001 the stockbrokers received higher commission than that agreed.
7. At this point, the Investigation Committee refers to the payment of commissions for the issue of 287.450.972 shares. The Committee supports that the commission of £2.08 million for 277.450.972 shares “has possibly been paid illegally since it concerns shares that have been allocated with irrevocable applications and the above amount has been submitted before the issue of the Prospectus”.
8. Under the title “Tax incentive for investors”, the Investigation Committee reports that the “exemption from the Income Tax of 30% of the investment mentioned in page 50 of the Prospectus cannot be granted based on law, since the Company does not fulfill the preconditions as determined by law (its shares were not listed in the CSE within the period of 3 months from the issue).