GILD Fund Management made changes in fund management
The supervision proceedings of the Financial Supervision Authority brought along changes in the activity of AS GILD Fund Management, which in the future should guarantee the thorough and sufficient protection of the interests of unit holders in the management of the GILD Arbitrage Venture Capital Fund.
The Authority also punished the fund manager in a misdemeanour proceeding with a fine for the presentation of false information regarding the fund investments of GILD Fund Management and for the failure to submit public reports on time.
“In the documents aimed at the Financial Supervision Authority, the public and unit holders, misleading information on the GILD Arbitrage Venture Capital Fund has been disclosed and obligatory reports have not been published on time. The fund manager must be accurate and unambiguous in their activities,” Raul Malmstein, Chairman of the Management Board of the Financial Supervision Authority, explained.
The presentation of information to the unit holders and public about the acquisition of mining rights for Armenian precious metals at the expense of the GILD Arbitrage Venture Capital Fund has proved to be misleading. According to the estimate of the Financial Supervision Authority, the acquired licences at first granted a right only to examine the reserves, with the aim of later applying for mining rights with regard to these resources. In spite of this, in several documents sent to the unit holders, it was referred or hinted as if the venture capital fund had acquired the rights to mine precious metals in Armenia. The Financial Supervision Authority is of the opinion that upon the presentation of information to the unit holders of the GILD Arbitrage Venture Capital Fund, the content of said licences should have been disclosed unambiguously. By today, the fund manager has sent corrections and specifications to the investors regarding previously disclosed information.
“The organisational changes made by GILD Fund Management, including the abandonment of control over the fund manager by the current owners and changes in the board of the fund manager, must increase trust towards the GILD Arbitrage Venture Capital Fund, which is economically in a tough situation,” Raul Malmstein, Chairman of Board of the Financial Supervision Authority, noted.
The amount of the fine imposed by the Financial Supervision Authority on AS GILD Fund Management is EEK 250 000. The fine rates of the financial sector have been prescribed in a manner similar to the general fine rates, that is, the maximum rate of fine in the field of finance according to the Estonian laws is also EEK 500 000. The Financial Supervision Authority still maintains that in the case of financial sector misdemeanours, it would be wise and practical to apply significantly higher fine rates.