Fine against Rapid Nutrition PLC

The decision of the Sanctions Commission of SIX Group AG imposing a fine of CHF 100,000 on Rapid Nutrition PLC for multiple breaches of IFRS accounting standards has become effective after withdrawal from the arbitral proceedings.

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SIX Exchange Regulation AG (SER) informed the public on 1 December 2020 about the submission of a proposal for sanctions to the Sanctions Commission of SIX Group AG against Rapid Nutrition PLC. SER’s sanctions proposal claimed that Rapid Nutrition PLC had incorrectly determined the fair values of financial assets and failed to provide disclosures about the risks and the fair value measurement of these financial assets. Further allegations contained the incorrect recognition of revenues from direct sales and licensing fees in the 2017/2018 annual financial statements as well as Rapid Nutrition PLC’s failure to perform a going concern assessment as of the financial year-end and failure to disclose the material uncertainties about its ability to continue as a going concern. SER also claimed a lack of governance over the financial reporting process leading to other alleged errors in the presentation and disclosures related to the 2017/2018 annual financial statements.

With regard to the 2018/2019 interim financial statements, SER held that Rapid Nutrition PLC had failed to re-measure its most significant financial assets and to present the correct comparative periods for the income statement, the statement of changes in equity and the statement of cash flows.

The SIX Sanctions Commission concluded that the incorrect determination of fair values for financial assets led to a material misstatement in the balance sheet and income statement of the 2017/2018 annual financial statements. Furthermore, information about the nature and extent of risks as well as the related implications on fair value measurement of these financial assets was insufficiently disclosed. In addition, the SIX Sanctions Commission concluded that there was a lack of governance over the financial reporting process and that no effective internal control system was in place for the preparation of the 2017/2018 annual financial statements, leading to various other errors in the presentation and disclosures.

Due to the missing re-measurement of Rapid Nutrition PLC’s most significant financial assets in combination with the incorrect presentation of comparative periods, the 2018/2019 interim financial statements were not presented according to IFRS requirements. The Sanctions Commission qualified each violation of the applicable IFRS rules as severe and the sum of all violations as extremely severe. Due to the lack of diligence, proper governance and effective internal control over financial reporting, the Sanctions Commission qualified Rapid Nutrition PLC’s conduct as “at least grossly negligent”.

As a result, the SIX Sanctions Commission upheld the proposal for sanctions of SER and, by decision of 30 March 2021, imposed a fine of CHF 100,000 on Rapid Nutrition PLC. In view of Rapid Nutrition PLC’s request for delisting from the SIX Swiss Exchange, approved on 21 December 2020 and effective as of 23 July 2021, the SIX Sanctions Commission did not grant SER’s request to immediately delist Rapid Nutrition PLC.

With Notice of Arbitration dated 8 June 2021, Rapid Nutrition PLC initiated arbitral proceedings against the decision of the SIX Sanctions Commission. On 5 January 2022, Rapid Nutrition PLC withdrew from the arbitral proceedings and acknowledged the decision of the Sanctions Commission.

If you have any questions, please contact
Hrvoje Tkalcec, Head Communications & Media Relations.
Phone: +41 58 399 2267
Email: ser_media@six-group.com

SIX Exchange Regulation AG is a legally independent company of SIX Group and of one the Regulatory bodies of the SIX trading venues. It performs the functions assigned under Swiss federal law and enforces the rules laid down by the Regulatory Board, and monitors compliance with legal and regulatory requirements. As part of its diverse remit, SIX Exchange Regulation AG submits proposals for sanctions to the Sanctions Commission or can enact sanction notices. SIX Exchange Regulation AG consists of the divisions Listing & Enforcement, responsible for regulating issuers, and Surveillance & Enforcement, which monitors trading.
www.ser-ag.com

SIX provides and operates stable and efficient infrastructure for the Swiss and Spanish financial centers, thus ensuring access to the capital markets and the flow of information and money between financial market players. As a global provider of financial information, SIX delivers high-quality reference, pricing, corporate actions, and ESG data and provides regulatory services and indices to clients around the world. The company is owned by its users (more than 120 banks) with a workforce of 4,160 employees and a presence in 19 countries.
www.six-group.com

Media Release

Fine against Rapid Nutrition PLC

The decision of the Sanctions Commission of SIX Group AG imposing a fine of CHF 100,000 on Rapid Nutrition PLC for multiple breaches of IFRS accounting standards has become effective after withdrawal from the arbitral proceedings.