The social media are abuzz with posts by embittered investors in CEDC who are now fearing for their funds consequent to the announcement that CEDC shares may be annulled without compensation. The editors of “Parkiet” have also received many e-mails on this subject; the authors of these messages are berating the Polish Financial Supervision Authority and the Warsaw Securities Exchange board, attacking them for “improper supervision over the company” and for deciding to suspend trading in CEDC shares.

What might be done ?

(…) Leszek Koziorowski, partner in the Gessel law firm, takes a similar view. “The press coverage seems to indicate that CEDC has specified the possibility of share annulment as one of the risk factors in its issue prospectus. If the company did not conceal such a possibility, there arises the question of whether any claims by investors against the company are justified”. “Only then”, Koziorowski adds, “could one imagine that the Polish authorities would have valid grounds for action”.

At the same time, Leszek Koziorowski emphasises that the Polish Financial Supervision Authority does not have the legal means or the locus standi to appear before foreign courts on behalf of investors. “Such rights extend to the Financial Supervision Authority’s President in a public prosecution capacity, but only before the Polish courts”. At the same time, Koziorowski offers the reservation that “this, of course, is not to say that the Authority cannot help the shareholders. The Polish Financial Supervision Authority may apprise them of the American laws which may have been violated in the present case (if any laws were in fact broken) and assist the shareholders in retaining legal counsel and organising themselves. In this sense, the role of the Authority would be more of an educational one”.

Anna Koper, Beata Drewnowska, Parkiet