One of the largest IPOs in 2010 is now being investigated by the Danish government.
The Danish Financial Supervisory Authority, the country’s market regulator, said Tuesday they will ask police to investigate Nordea Bank Denmark, a unit of Sweden's Nordea, for failing to report its financial interest in jewelry maker Pandora in an investment analysis prior to the company’s float in October, Reuters reports.
The FSA said at the time of the analysis, Nordea’s indirect ownership in Pandora was 3.9 percent, the FSA reportedly said. Before the company was listed on the Copenhagen stock exchange, that stake was worth around 1.23 billion Danish crowns ($238.5 million).
“It is the FSA's evaluation that the general disclaimer does not sufficiently live up to the notice requirements regarding the announcement of significant financial interests,” the FSA reportedly said in a statement.
Nordea has reportedly admitted fault and said it will “adjust” its notification policy.
Nordea was one of the arrangers of Pandora’s IPO on the Copenhagen Stock Exchange in October, Reuters reports. That float raised $2.1 billion for the company, known for its popular charm jewelry. It was the fourth largest IPO in Europe in 2010.
The company, which designs its jewelry at its Copenhagen’s headquarters and makes them in cost-friendly Thailand, was flying high following the IPO with earnings reports touting spectacular growth until August 2, when the company released its second quarter report two weeks early with less than expected growth as well as declines in major markets. It drastically downgraded its sales and profits targets for 2011 from a revenue growth of no less than 30 percent to 0; and noted that sales fell 30 percent in July.
The profit warning caused the company’s stock to drop 70 percent in less than a day. Since its IPO, the company has reportedly lost 80 percent of its value.