JSC Olainfarm draws attention of the FCMC about Peteris Rubenis' false and tendentious statements

JSC Olainfarm draws the attention of the Financial and Capital Market Commission (FCMC) to the fact that on December 5, 2019 Peteris Rubenis, in the name of its largest shareholder limited liability company OLMAFARM, disseminated false and tendentious information about Olainfarm Supervisory Council electing new officers on the Management Board of the company. Olainfarm has asked the FCMC to assess the legality of Peteris Rubenis' actions of disseminating false information about Olainfarm's governing bodies, their representatives and newly elected Management Board members to the public.

In Olainfarm’s view, Peteris Rubenis deliberately distributes information that is negative, false and based on subjective assumptions on the behalf of its largest shareholder limited liability company OLMAFARM. As is well known, one of the factors influencing the price of a company's share is public information about the company's management and operations. Thus, the allegations made by Peteris Rubenis, Chairman of the Management Board of OLMAFARM, whose election has been declared invalid by the court, adversely affect both the activities of Olainfarm and the possibility that it may violate the rights of other Olainfarm shareholders and cause damage to the Latvian capital market reputation.

On December 5, 2019, shortly after Elena Bushberg was elected as a member of the Management Board of Olainfarm, it was publicly announced that the largest shareholder of JSC Olainfarm OLMAFARM, represented by its Chairman of the Management Board Peteris Rubenis, considered the appointment of these people for the Olainfarm Management Board as illegal. According to Clause 1, Paragraph 1 of Article 292 of the Commercial Law, one of the tasks of the Supervisory Council shall be to elect members of the Management Board and supervise the activities of the Management Board. Article 4 of the Articles of Association of Olainfarm stipulates that the Management Board shall consist of seven members. Until this day, the Management Board of Olainfarm has been operating with five members. By appointing Jeroen Weites as Chairman of the Management Board and electing E. Bushberg as a Member of the Management Board, Olainfarm has met all the requirements stated in the Commercial Law and the Financial Instruments Market Act.

Olainfarm cannot agree with the statement made by Peteris Rubenis, on behalf of limited liability company OLMAFARM, as on August 14, 2019, information about Olainfarm's intention to attract senior management with international experience in pharmacy was already published on the website of JSC Nasdaq Riga. According to that statement, amongst other things, it was planned to strengthen the management team of Olainfarm, the Supervisory Council of the company has decided to appoint a new candidate for the position of the Chairman of the Management board with international experience in pharmacy. The change of the Chairman of the Management board is a planned strategic decision in the direction of development of Olainfarm in order to facilitate the acquisition of new markets and increase the international competitiveness of the company. Given that Peteris Rubenis publicly commented the announcement on August 15, 2019, there is no reason to believe that he was not aware of the intention of Olainfarm's Supervisory Council to advance the operation of the company as well as the process of selecting candidates.

Attention should also be drawn to the fact that J. Weites and E. Bushberg were selected in the framework of an international recruitment tender provided by an independent international top-level recruitment company – Amrop Latvija. During the selection process, the eligibility of the candidates for the Olainfarm Management Board member position has been carefully assessed and no circumstances have been identified that would prevent them from holding the position of the Chairman and Member of the Management Board.

It should be noted that by the ruling of the Zemgale District Court on November 20, 2019, the court has annulled the decision made during the meeting of the shareholders of limited liability company OLMAFARM on June 13, 2019, appointing its sole member Peteris Rubenis as a member of the Management Board and demoting the previous Management Board member.

JSC Olainfarm is one of the largest companies in the Baltic States with more than 45 years of experience in production of pharmaceuticals and chemical and pharmaceutical products. The basic principle of the company is to produce reliable and effective top quality products for Latvia and the whole world. Currently, JSC Olainfarm products are exported to more than 60 countries worldwide, including the Baltic States, Russia, other CIS countries, Europe, North America, Asia and Australia.

Additional information:  
Janis Dubrovskis
Investor Relations Advisor of JSC Olainfarm
Phone: +371 29178878
Email: janis.dubrovskis@olainfarm.com