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CR 06/2024 Third statement of the LPP SA Company on the Hindenburg Research report

Current report no: 6/2024
Date: 15 March 2024
Time: 03:18 PM


With reference to today’s preceding current reports, the Company announces that today notifications of suspected criminal offences against LPP SA and its shareholders, stock exchange investors, posing a threat to the security of the financial market, have been submitted to the Prosecutor’s Office. The notifications are based on false or manipulated information published today in the Hindenburg Research material.

Furthermore, the Company presents its preliminary comments on the information contained in the aforementioned material.

The Company firmly and entirely denies and disclaims the information contained in the Hindeburg Research material. In particular, the Company informs that:

  1. it does not carry out commercial activities on the territory of the Russian Federation;
  2. the sales transaction of the Russian company was not fictitious and did not involve accounting or accounting manipulation;
  3. it has not controlled the Russian company OOO Re Trading and its operations since 2022;
  4. the entities operating under the names Fashion Group Textile and Asia Fashion Import Export are not in any way controlled by LPP SA;
  5. the entity operating under the name Far East Services is not controlled in any way by LPP SA;
  6. the Management Board of LPP SA has not financed in any way the sale of shares or the operation of the business in Russia after its sale, including through loans secured by pledges on LPP SA shares;
  7. it did not make shipments of goods to Russia via the territory of Kazakhstan;
  8. it did not change the auditing firm examining the financial statements of the Company and its Group in connection with the transaction of the sale of the Russian company or the resulting issues (the change resulted from the expiry of the term for which the auditing firm was selected).

At the same time, the Company informs that, as part of the set of agreements concerning the sale of the Russian company, during the so-called transitional period, it undertook to release the previously ordered goods (the so-called old stock, designed and ordered prior to the transaction) and to provide information on potential suppliers of the goods and basic operational processes, including code marking of the goods. Contrary to the assertions in Hindenburg Research’s material, these provisions do not deviate from market standards for transactions of this type and size, especially concluded under the circumstances of the mass exodus of international business from Russian territory and the poor prospects of this market at the time of contracting.

The Company is in the process of analysing this extensive material in detail and will refer to it in future announcements.