The subject of the dispute is the Ministry of Finance’s counter-proposal from June 2022 to increase the return on one share by ten percent compared to ČEZ’s original plan. The company received the proposal two weeks before the general meeting, but kept it inside the company for the next six days, despite the fact that such information could affect the value of the company’s shares.
The Central Bank, which oversees the domestic financial market, fined ČEZ a million crowns for this. According to the CNB, the company violated the European regulation on market abuse. The penalty was also imposed for violating the law on doing business on the capital market, because the company did not even inform the central bank about the Ministry of Finance’s proposal, although it should have done so immediately.
“In the CNB’s opinion, ČEZ did not inform the public about the counter-proposal, which, if published, would probably have a significant impact on the price of ČEZ shares. It threatened the transparency of the financial market and the equality of its participants,” Štěpánka Tykalová, spokeswoman for the Municipal Court in Prague, where CEZ will be tried for the fine, told Aktuálně.cz.
ČEZ explains the six-day delay in the publication of the counter-proposal by saying that the board of directors headed by the CEO had to adopt an opinion on it. “In our opinion, the counter-proposal alone without the opinion of the board of directors did not allow for its complete and correct assessment by the investing public, and therefore we published it together with the opinion of the board of directors,” ČEZ spokesman Ladislav Kříž told the server.
Although the energy companies defend the delay in making the main shareholder’s counter-proposal available, they have already acknowledged one mistake, Aktuálně.cz points out. “ČEZ does not dispute the violation of the obligation to send the aforementioned counter-proposal to the CNB immediately,” said Tykalová.
The lawsuit, in which ČEZ requests the cancellation of the sanction and the interpretation of key regulations, will be heard by the Municipal Court in Prague on Thursday. The CNB, which has been dealing with ČEZ’s wrongdoing for almost a year and a half, does not want to comment further on the case. “It is up to each party to the proceedings who has been sanctioned whether to defend themselves with a lawsuit. The matter is left to the CNB to be assessed by the court,” bank spokesman Jakub Holas told the website.
CEZ is one of the largest energy companies in the Czech Republic. Its majority shareholder is the state, which holds roughly 70 percent of the shares through the Ministry of Finance. The net profit of the ČEZ energy group fell by 63 percent year-on-year to 29.6 billion crowns last year.
