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EQT faces market abuse probe by Swedish regulators over $2.7bn share sale

Fri 24 September 2021 12:48 | A A A

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(Sharecast News) - Listed private equity group EQT is being probed by Swedish regulators over potential market abuse after a controversial $2.7bn share sale by top executives.

Shares in the company fell sharply on Friday as the Swedish Financial Supervisory Authority said it was investigating whether EQT violated rules by failing to disclose insider information promptly.

A secondary offering of EQT shares angered some investors because it broke the terms of a lock-up agreement made at the time of its IPO.

EQT announced this month that existing and former partners, including chair and founder Conni Jonsson and chief executive Christian Sinding, would sell 63m shares in the group representing about 6% of the total capital and 11% of the top executives' holdings.

Under the lock-up agreement the stock was not supposed to be sold until September 2022. But EQT on September 7 said the shares would be sold.

EQT also said on September 7 that another 8% of its share capital would be released from lock-up in 2023 with the remaining partners' shares unlocked between 2024 and 2028. Partners had to commit to reinvest half of the proceeds of any share sales into EQT funds, the firm added.

Jonsson at the time said the sale would boost EQT's shareholder base and improve liquidity. "It is also about future-proofing EQT further. The firm will benefit from a more solid governance, a stronger alignment of interests, and a broadened ownership base," he said.

EQT said on Friday it remained in dialogue with the Swedish Financial Supervisory Authority, and that it still believed it had "handled the timing of announcing the insider information correctly . . . Now it is important to let the process take its course."

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