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REGAL PETROLEUM PUBLICLY CENSURED AND FINED £600,000

London, UK 11/17/2009 11:55 PM GMT (WooEB)

The London Stock Exchange today issued a public censure and fine of £600,000 against Regal Petroleum plc ("Regal" or "the Company").  These sanctions were imposed by the AIM Disciplinary Committee for numerous, serious breaches of the AIM Rules in connection with its oil exploration wells in the Kallirachi Prospect, an area in the North Aegean Sea.

 

On 11 separate occasions, Regal failed to take reasonable care to ensure that its announcements were not misleading, false or deceptive, and did not omit material information.  On two occasions, Regal also failed to release price sensitive information without delay.

 

In particular, Regal contravened AIM Rule 9 (equivalent to the current AIM Rule 10) by:

 

using language in its announcements that created a misleading impression as to the potential commercial viability of the Kallirachi Prospect;

 

being over-optimistic in the information it notified, focussing on the higher end of expectations without adequate explanation of this fact, and omitting an adequate description of the risks associated with the Prospect; and

 

not accurately reflecting in its announcements the test results from the Kallirachi wells or the conclusions of independent experts on which the announcements were based

 

In contravention of AIM Rule 10 (equivalent to the current AIM Rule 11), Regal failed to announce without delay poor test results and the plug and abandonment of the two wells drilled within the Kallirachi Prospect.

 

Nick Bayley, Head of UK Regulation at London Stock Exchange Group, said:

 

"Today's public censure and fine closes an exceptional case in AIM's history.  It is unprecedented in terms of the seriousness of the rule breaches involved and the resultant market impact. These factors contributed to the AIM Disciplinary Committee's decision to impose the highest fine in AIM's history.

 

"Following an investigation by the Exchange and the FSA, the Exchange's action was contested by Regal, resulting in lengthy disciplinary proceedings.  Today's action demonstrates that the Exchange takes the accurate and timely disclosure of price sensitive information by quoted companies very seriously.  Whatever the size, profile or complexity of the breach, the Exchange is prepared to take firm action against companies that fall short of the required standards."

 

Full details of the breaches can be found in the censure.

 

For further information please contact:

Patrick Humphris / Alastair Fairbrother
Press Office +44 (0)20 7797 1222
newsroom@londonstockexchange.com

 

Background to Regal Petroleum:

Regal Petroleum, a company focussing on exploration, development and production of oil and gas assets in various countries including Greece, Ukraine and Romania, was admitted to AIM in September 2002.

 

Relevant Regulatory Provisions:

All references to the AIM Rules in today's censure are to those in effect at May 2003. While the AIM Rules were amended during the Relevant Period, the rules that are the subject of this censure remain unchanged, other than in respect of their numbering. The equivalent rules currently in force are Rules 10 and 11 of the AIM Rules for Companies, June 2009:

 

AIM Rule 10

The information which is required by these rules must be notified by the AIM company no later than it is published elsewhere. An AIM company must retain a Regulatory Information Service provider to ensure that information can be notified as and when required.

An AIM company must take reasonable care to ensure that any information it notifies is not misleading, false or deceptive and does not omit anything likely to affect the import of such information.

It will be presumed that information notified to a Regulatory Information Service is required by these rules or other legal or regulatory requirement, unless otherwise designated.

 

AIM Rule 11

An AIM company must issue notification without delay of any new developments which are not public knowledge concerning a change in:

♦ its financial condition;

♦ its sphere of activity;

♦ the performance of its business; or

♦ its expectation of its performance,

 

which, if made public, would be likely to lead to a substantial movement in the price of its AIM securities.

 

 


 

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