AIM company fined for late disclosure of inside information under MAR

An overview of the FCA's final notice issued to Tejoori Limited.

The Financial Conduct Authority (FCA) has fined Tejoori Limited (Tejoori) £70,000 for failing to disclose inside information as required by Article 17(1) of the Market Abuse Regulation (MAR). This is the first financial penalty imposed by the FCA on an AIM company for non-compliance with MAR and also its first enforcement action of any sort under MAR.

Our view

What is interesting about this case is that the obligation to disclose arose at an intermediate stage in a protracted process, when the draft notice which required Tejoori to sell its shares (drag along notice) and share purchase agreement (SPA) were sent on 12 July 2016 and that, as a result of its previously announced valuation, Tejoori could not have delayed disclosure because to do so would have misled the public.

The FCA notice states that, although the drag along notice and SPA had not yet been signed, Tejoori was nonetheless in the possession of inside information regarding its shareholding in BEKON. As that information was materially different from Tejoori’s previous public announcement regarding its valuation of its shareholding in BEKON on 05 February 2016, it would not have been permissible for Tejoori to have delayed disclosure to the public pursuant to Article 17(4) of MAR.

In other circumstances Tejoori might have been able to rely on Article 17(4) which allows the disclosure of inside information to be delayed subject to various conditions, one of which is that the delayed disclosure does not mislead the public. Here, the complication is that the public would have been misled (and actually were) by virtue of the previously announced higher valuation of the investment.

Had Tejoori complied with its MAR obligations, this would have required it to have disclosed the potential transaction before BEKON and its purchaser had done so.

As this was a relatively clear cut case of a failure to disclose inside information (by oversight rather than deliberate) as is was clearly inside information, the case does not provide any insight into the greyer areas where it is not clear whether the information is inside information or whether delayed disclosure would have been appropriate.


Tejoori held two investments, one of which was a shareholding in BEKON Holding AG (BEKON), a privately owned German renewable energy company.

05 February 2016 - Tejoori’s interim results for the six months ended 31 December 2015 were released which included Tejoori’s investment in BEKON at a value of $3.35m. The interim results noted that “[d]espite all the challenges that BEKON has faced, the Board remains confident of the future prospects of this investment”.

23 May 2016 - BEKON updated its shareholders, including Tejoori, about its financing arrangements and potential corporate developments, including offers relating to a potential takeover of BEKON. As part of the update, BEKON notified its shareholders that it had received a takeover offer from Eggersmann.

08 June 2016 - BEKON informed its shareholders that, on the basis of Eggersmann’s offer, it had reached a non-binding agreement on a letter of intent and that Eggersmann was now preparing a draft SPA for the acquisition of all shares in BEKON. It also provided a spreadsheet so that each shareholder could calculate what they could expect to receive in exchange for their shares in BEKON. According to the spreadsheet, Tejoori would only receive deferred consideration, which was dependent on the future performance of certain projects, and in the best case scenario Tejoori could expect to receive €1.15m in deferred consideration over five years.

02 July 2016 - BEKON informed its shareholders that the SPA was ready to be finalised and that as several major shareholders had indicated that they supported the sale BEKON intended to use their drag-along rights in respect of the remaining BEKON shareholders. BEKON provided its shareholders with the draft drag-along notice that would be used by the major shareholders to require Tejoori and the other minority shareholders to sell and transfer all of their BEKON shares to Eggersmann. BEKON also provided its shareholders with the final SPA and a spreadsheet which showed the same consideration as on 08 June 2016.

19 July 2016 - Tejoori received the signed drag-along notice from BEKON’s majority shareholders which required Tejoori to sell and transfer all of its BEKON shares to Eggersmann and to sign the SPA within ten business days from the date of receipt of the notice. The notice included an updated spreadsheet which showed that Tejoori would receive no initial consideration and, in the best case scenario, it could expect to receive €1.16m in deferred consideration over five years.

27 July 2016 - Tejoori granted its legal representative a power of attorney to sign the SPA with Eggersmann and the legal representative signed the SPA, which obliged Tejoori to transfer its BEKON shares to Eggersmann upon payment of the initial purchase price to BEKON’s majority shareholders, the next day.

10 August 2016 - Tejoori’s shares in BEKON were transferred to Eggersmann.

11 August 2016 - BEKON and Eggersmann both issued press releases about the acquisition. Eggersmann’s press release stated that it had acquired 100% of the shares in BEKON. BEKON’s press release stated that BEKON had been taken over by Eggersmann and was now part of Eggersmann. The press releases did not refer to Tejoori and Tejoori did not release an announcement at that time.

22 and 23 August 2016 - the market speculated openly about the amount paid to Tejoori, which resulted in Tejoori’s share price rising by 38%.

24 August 2016 - Tejoori made an announcement which confirmed that the shares had been sold for no initial consideration. Tejoori’s share price closed 13% down on the day of the announcement.

FCA AIM timeline 


The FCA concluded that Tejoori breached Article 17(1) of MAR because it failed to inform the public as soon as possible of inside information which directly concerned it. Specifically, it did not release an announcement as soon as possible after being informed on 12 July 2016 that there was a reasonable expectation that it would be required to sell its shares in BEKON for no initial consideration with the possibility of receiving deferred consideration. The expected deferred consideration was likely to be materially lower than Tejoori’s valuation of the investment in its latest interim results. This breach created a false market in Tejoori’s shares during the period between 12 July and 23 August 2016.


The initial penalty figure of £8,617 which was produced using the FCA’s 4 step process was increased to £100,000 as the smaller figure was not considered a sufficient deterrent to Tejoori and other issuers. The £100,000 was then discounted by 30% as agreement to settle the case had been reached at an early stage (Stage 1).

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