The District Court of Glostrup revealed its verdict last week, stating that the jewellery company was in breach of the Securities Trading Act and that it had been ordered to pay DKK2 million (AU$397,210).
The decision concerned an indictment filed in November 2013 by the Danish Public Prosecution for Serious Economic Crimes that related to a profit warning released by Pandora in August 2011.
As previously reported by Jeweller, Pandora was accused of failing to inform the market in a timely manner that it had downgraded its 2011 profit targets, which it was obliged to do no later than 18 July.
The announcement – which stated a revised profit of zero increase, compared to an original expectation of at least 30 per cent – was made on 2 August, more than two weeks after the deadline and a fortnight prior to releasing its 2011 second quarter financial results.
Pandora at the time claimed the cumulative effect of substantial price increases and poor marketing execution were the major factors resulting in the revenue drop.
In response to the court’s verdict, the jewellery company stated it planned to appeal the District Court of Glostrup’s ruling in the Eastern High Court.
Speaking to Jeweller, a Pandora spokesperson said, “Pandora continues to believe that it acted properly during a swift and unexpected downturn in sales by making a timely and precise announcement adjusting its annual forecast in light of new information and based on an analysis of the changing market dynamics in July 2011, and that it has at all times been in full compliance with the [Securities Trading Act].”
The spokesperson declined to discuss the timing of its appeal, but it was noted that the court’s ruling would not have an impact on the company’s 2014 financial outlook.
In a separate case but relating to the same matter, Pandora was sued by a group of 36 investors in July this year. The shareholders claimed that due to the late warning, Pandora experienced a 65.36 per cent stock loss in a single trading day, resulting in “the destruction of DKK12.5 billion (AU$2.4 b) of market value”.
Pandora, which is based in Copenhagen, Denmark, was founded in 1982. The company’s jewellery is sold in more than 80 countries through approximately 9,800 points of sale.
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