Linnaeus raps Selonda over stock sales

Relations between Dutch investment fund Linnaeus Capital Partners and Greek fish-farming company Selonda seem to have become strained by a public dispute as the latter is trying to improve its bargaining position in light of the likely concentration of the sector in Greece.

In a lengthy letter, Linnaeus last week accused Selonda, in which it owns a 25 percent stake, of deliberate negligence over the Greek firm?s planned merger with Interfish. It also criticized the sale of a package of Interfish Aquaculture shares to investors at very low prices.

Linnaeus also suggested that it would not hesitate to take legal recourse in order to protect the transparency of all exchanges and the standards of corporate governance.

Specifically, the fund said that it has serious reservations concerning the lack of clarity regarding the exact timing of the merger, as well as recent decisions made by Selonda?s board of directors that reduced the company?s stake in Interfish via the following stock sales: 1 million shares (or 3.46 percent of Interfish) to Marven Enterprises Company Ltd and 1,856,541 shares (or 6.4 percent of Interfish) to Brucekan Finance Ltd. The result of these sales was a reduction of Selonda?s stake in Interfish to 36.341 percent from 46.201 percent.

In regard to the sale of these shares, and especially to the sale made to Brucekan Finance, Linnaeus wonders why it was not approached with the idea first given that it has expressed an interest in acquiring shares in the company.

Moreover, during the September sale of a 6.4 percent stake in Interfish to Brucekan Finance, the price was 0.13 euros per share, compared to the 0.67 euros per share that Linnaeus had paid in July to purchase 857,611 Interfish shares from Jazan Development Company.

It is this discrepancy in the share price that has compelled some at Linnaeus to suggest that Selonda is resorting to underhand tactics in order to get the best possible price if and when it decides to proceed with the sale of a tranche of Selonda shares. Linnaeus has already succeeded in acquiring a 25 percent stake in Selonda over the past year, while its intention to increase its participation in the rest of the companies in the sector in Greece with the aim of concentrating them under one roof is common knowledge.

Apart from its 25 percent stake in Selonda, Linnaeus also owns 23.04 percent of Nireus fish farms and 30.4 percent of Dias.

In its letter, Linnaeus also questions the delay in the merger of Selonda with Interfish, which was announced in late 2008 and has yet to move ahead.

Speaking to Kathimerini, Selonda?s managing director John Stephanis said that the merger process is currently in development and therefore he could not comment on any of its legal aspects.

However, the meeting at which shareholders will either accept or reject the merger is yet to be scheduled, although Stephanis assures that this will be done by the end of 2011 or early 2012, while he also confirmed that he is not willing to sell a stake in Selonda to the Dutch fund.