Asia Offshore Driling Ltd.
Delayed financial reporting
Reference is made to Finanstilsynet’s (the Financial Supervisory Authority of Norway) preliminary decision and notice of violation penalty of 17 December 2012; see the Norwegian Public Administration Act section 16 and the response dated 21 December 2012 from Seadrill Management AS on behalf of Asia Offshore Drilling Ltd.
As stated in the notice, the deadline for publication of the quarterly reports is at the latest two months after the end of the quarter; see the Norwegian Securities Trading Regulations (STR) section 5-5 subsection (5). The report for the third quarter 2013 should therefore have been made public by 30 November 2012. Publication must be in accordance with the Norwegian Securities Trading Act (STA) section 5-12.
According to Oslo Børs' "Newsweb", Asia Offshore Drilling Ltd. published the report for the third quarter 2012 on 3 December 2012 at 15:11hrs.
Asia Offshore Drilling Ltd. does not dispute the fact that the annual report was published after the deadline referred to in the STA. Asia Offshore Drilling Ltd. states that the reason for the delay was practical impediments. Further Asia Offshore Drilling Ltd. states that due to the company's shareholder structure there was very limited interest in the market for the third quarter report and that Seadrill had a mandatory offer ongoing from 12 November – 10 December 2012. After completion of the offer, Seadrill Ltd.'s ownership increased to 66.16%. Hence the free float was further reduced to 0.09%.
At the end of November 2012 Seadrill Ltd. owned approximately 65.95 % of company and Mermaid Maritime Public Company Ltd owned 33.75 % of the company; hence the free float of shares only represented 0.3 %. There was there for hardly any trading in Asia Offshore Drilling Ltd.'s shares in this period.
According to STA § 17-4 subsection 2, Finanstilsynet may impose a penalty if the deadline for punishing the annual report is overstepped. The violation must have been committed wilfully or through negligence in order for Finanstilsynet to impose such a violation charge. The issue is thus whether Asia Offshore Drilling acted contrary to the requirement of proper conduct. Asia Offshore Drilling Ltd. states that the reason for the delay was practical impediments. The company does not explain further what it has done to prevent the delay. Finanstilsynet is of the opinion that the delay is a negligent violation of STA § 5-5 subsection 5.
STA section 17-4 (5) specify the criteria to be applied when fixing the amount of the penalty. Pursuant to section 17-4 (5) when the size of a penalty is assessed “importance shall in particular be attached to the scale and effects of the violation as well as the degree of guilt found”. After making a renewed individual assessment of the size of the notified violation charge, taking into account the information from the company, Finanstilsynet asks Asia Offshore Drilling Ltd. to disregard the notice of violation charge and has consequently waived the charge.
Finanstilsynet emphasizes that any repeated violation of the deadline for financial reporting in the future may result in a violation charge.
Gaute S. Gravir
Head of Section
Ellen Cecilie Pettersen-Hagh