Biznes Fakty
LPP Group fined by the Polish Financial Supervision Authority (KNF). Nearly PLN 2 million after sanctions were eased.
As part of an agreement with the Polish Financial Supervision Authority (KNF), the apparel company LPP will incur a penalty of PLN 1.8 million for allegedly postponing the release of information concerning the divestment of a Russian subsidiary. The firm asserts that accepting this settlement does not imply any admission of fault, but is a move aimed at swiftly resolving the issue in favor of investors. With this special arrangement, the KNF notably lessened the penalties.
The KNF’s inquiry focused on the firm’s communications regarding the divestiture of its Russian operations. In 2024, Hindenburg Research accused LPP of falsely presenting its exit from the Russian market.
The fine was imposed due to the company’s failure to disclose confidential information generated on May 10, 2022, pertaining to the negotiations agreed upon by the parties, key terms, and the structure of the transaction involving the sale of a 100% stake in Re Trading OOO.
Reserved LPP SalonLPP system
The Polish apparel titan shared its stance with the business editorial team at tvn24.pl regarding its acceptance of the arrangement offered by the Polish Financial Supervision Authority (KNF). This pertains to the proceedings concerning the alleged delay in disclosing the details of the Russian company sale, finalized in May 2022. The company agreed to the KNF’s proposal to settle the issue without protracted legal battles, aiming to reassure investors.
„All information requested by the Polish Financial Supervision Authority, including the transaction timeline, buyers, pricing, and terms of the put option, was presented in current reports from December 2024 and April 2025.” The company stresses that in disclosing this information, it acted in the interest of investors, providing essential data for their decision-making.
The vice president of LPP highlights that the claims made in the Hindenburg report have not been substantiated in any way.
„We received a penalty from the Polish Financial Supervision Authority (KNF) for – according to the regulator – delays in communicating our exit from the Russian market, not for the accusations made by Hindenburg. The dialogue with the regulator persisted because this was an unprecedented case of share price manipulation within the European Union market. Hindenburg Research’s sole aim was to create substantial profits for the fund, its clients, and its partners through short-selling LPP shares, at the expense of investors. We are pleased that the matter has been resolved and a settlement achieved,” stated Marcin Bójko to PAP Biznes.
Settlement „for the good of investors”
„LPP submitted a request to the Polish Financial Supervision Authority (KNF) to reach an arrangement, motivated by the need to conclude the proceedings with the KNF and avoid escalating them to court. When determining the scope of information to be disclosed regarding the sale transaction of the Russian company, LPP relied on its best judgment regarding what information was vital for investors’ decision-making, adhering to the rational investor standard,” the company informed the business editorial team at tvn24.pl.
„The arrangement institution, i.e., the settlement form, does not inherently reflect LPP’s belief that it has failed to meet its disclosure obligations, but rather its intention to resolve the dispute with the Polish Financial Supervision Authority for the benefit of investors, preventing it from dragging on for years,” LPP added.
False allegations made by a research company
In the press release, the company also addresses a March 2024 report from the American research entity Hindenburg Research, which was purportedly misleading, insinuating that the sale of the Russian company was fabricated and that the company continued its operations in Russia. According to LPP, the report aimed to incite panic, enabling the fund to profit from short selling shares.
„This further confirms to us that the accusations in the so-called Hindenburg report published on March 15, 2024, alleging a fictitious exit from the Russian market were and remain clearly false. Rather than inciting panic among investors on March 15, 2024, Hindenburg should have taken the time to verify its assumptions with the LPP management board. Hindenburg did not do this as it was not interested in the truth, but rather in generating significant profits by creating panic among investors,” explained Sławomir Łoboda, Vice President of the Management Board of LPP.
Extraordinary mitigation of punishment
LPP has reported the case to the District Prosecutor’s Office in Warsaw, which is currently investigating claims of share price manipulation by individuals linked to Hindenburg Research. The fund stressed in its report that it is not accountable for the accuracy of the information provided.
As the company disclosed, the PLN 1.8 million penalty results from the Polish Financial Supervision Authority’s decision to extraordinarily reduce sanctions, which represent 0.01% of the group’s revenue for 2024.
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