Several people involved in the deal, including a Kalina executive who purchased shares in his own name, bought stock before the acquisition, Dmitry Pankin, head of Russia’s financial markets regulator, said in a blog post. Kalina shares surged 75 percent to 2,198 rubles in the three weeks before the announcement, which Pankin said triggered the investigation.
“This is the first proven case of the illicit use of insider information on the Russian market,” Pankin said.
While Russia’s federal law on insider information and market manipulation came into force in January 2011, those who violate the legislation can only be criminally prosecuted from July 27. Unilever, the world’s second-biggest consumer goods company, agreed to acquire 82 percent of Kalina, the maker of Black Pearl facial products and Silky Hands creams, in a deal valuing the company at 21.5 billion rubles ($694 million).
Unilever (UNA)’s Moscow press service didn’t immediately respond to calls and e-mailed requests for comment. The case materials will be sent to the police in the “near future,” Pankin said.
“Our laws aren’t sophisticated enough to uncover more cases like these and they took this case and publicized it because it was easy to crack,” Vitaly Kupeev, an analyst at Allianz Investments in Moscow, said by phone. “This was easy to uncover because Kalina’s shares were illiquid, had low trading volumes, and it was possible to discover without interfering with the interests of any influential people.”
The regulator analyzed information on more than 300 people and about 50 companies involved in the deal, Pankin said. The volume of trades exceeded several hundred million rubles, according to Pankin.
“The year is 2013 and Russia might have its first proven case of insider trading,” Luis Saenz, head of equity sales and trading at BCS Financial Group, said in an e-mailed note.
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