The Polish Financial Supervision Authority (PFSA) has fined Murapol over PLN 10 million for breach of its obligations related to having a qualifying holding in Skarbiec Holding S.A. The PFSA found that Murapol, together with other entities, had exceeded the 33% threshold of the total number of votes and had failed to announce a so-called follow-up call and make relevant notifications.

Murapol responded with an elaborate communication in which it justified in detail the correctness of its actions and announced its intention to defend its interests in further proceedings.

The scale of the penalties (99% of the maximum sanctions!) has already been the subject of excellent commentaries (the impeccable Mirosław Kachniewski!)

The case is interesting also because it concerns so-called stock parking, namely the scope of admissibility of using such solutions without the risk of falling into the trap of regulations on qualifying holdings. Although Murapol fell into the trap, it keeps on fighting. Stock parking is often used on the capital market, so the PFSA interpretation may lead to many problems not only for Murapol, but also for other issuers and their shareholders.

The provisions of the Act on Offering related to qualifying holdings have always raised doubts. There have been many reasons for this. From the most important one, i.e. the attempt to regulate many complicated situations and events, through regulatory encroachment in the area of large and conflicting interests, to incorrect translations of directives and linguistic inaccuracies of Polish laws.

The idea of these regulations is to impose obligations (calls, notifications) also on entities other than those simply acquiring shares. The assumption is that there are many situations which, although not connected with the acquisition of shares, tend to have a similar effect and should therefore entail the same obligations. This applies to various events leading to gaining control over voting rights due to having qualifying holdings of shares in a public company. It ranges from relatively simple situations (purchase of depositary receipts), through acquisition of shares by several investment funds managed by the same investment fund company, to the notorious acting in concert. One such case is also the holding of shares by a third party in its own name, but on the instructions or on behalf of that entity. The issue is whether, if a third party acquires shares (in its own name) but on the instructions or on behalf of another person (the parking party), the votes from those shares should be added to the parking party’s holding.

(Based solely on media information) simply put, it can be said that the PFSA argues that the votes from such holdings should be added up, while Murapol argues that they should not. For the PFSA, the key point is that third parties held shares in their own name but on behalf of Murapol, which was a case of so-called stock parking. The PFSA emphasised that for so-called stock parking to occur, it is sufficient that the parking party bears the economic risk related to the shares, while their (official) owner is free of this risk. In this case, Murapol denies this, stating that the owners were exposed to the economic risk. Of course, assessing the case would require knowledge of the entirety of the evidence, but the transfer of economic risk is usually done through agreements or instruments guaranteeing the repurchase of shares at a specific price.

Murapol, however, seems to place more emphasis on the actual possibility of exercising influence over the way in which voting rights from the parked shares are exercised . Here we have a very clearly delineated legal dispute as to whether, in order for a given situation to be considered stock parking, it is necessary for the parking party to be able to influence the exercise of the voting rights from the shares by the (official) owner of the shares, or whether it is sufficient for the shares to be “parked” with people whose actions with respect to exercising the voting rights they cannot influence.

Such a debate has already been underway, in particular since swap instruments, which made it possible to easily acquire shares, began to be used on a larger scale. The use of such instruments created a new situation in the company even though there were no changes (at least up to a point) in the shareholder structure.

It is thus yet another iteration of the dispute over the essence of the regulations on qualifying holdings. Should we take a more literal approach to their interpretation or should we take the objective as the basis for their interpretation? How should we define this objective? Even if we focus on the wording, what does “holding on behalf of another entity” mean? Is it crucial to define those obliged to comply with the provisions as broadly as possible, or should the circle of stakeholders be narrow and unambiguously defined? There is much to think about.