January 23, 2020 / 8:05 AM / a month ago

Hungary's central bank sanctions 4iG, MTelekom over collapsed T-Systems deal

BUDAPEST, Jan 23 (Reuters) - Hungary’s central bank has fined information technology firm 4iG over the collapse of a takeover bid last year, and called on telecoms operator Magyar Telekom to explain why it delayed publishing insider information on the deal.

Spokesmen for the two companies did not immediately respond to a request for comment. Shares in Magyar Telekom opened 0.5% lower at 458 forints on the Budapest Stock Exchange, in line with the benchmark index.

4iG signed a preliminary deal last July to buy its bigger rival T-Systems, owned by Deutsche Telekom unit Magyar Telekom, as part of a wider expansion drive fuelled by debt.

But Magyar Telekom said in December that 4iG had terminated negotiations. Shares in 4iG fell as much as 12.5% the next day due to the unexpected collapse of the deal.

The central bank, which is also in charge of financial market regulation, fined 4iG 5 million forints ($16,509) after the firm presented an incorrect list of people with knowledge of the breakdown in talks, in violation of the law, it said.

“Based on the provisions of the European Union regulation on market abuse (MAR), 4iG incorrectly specified when insider information on closing the transaction originated,” the central bank said in a statement on Thursday.

The bank has requested information from the two companies to establish the timing of the deal’s collapse.

It said Magyar Telekom, which requested a delay in publishing the insider information, had not provided adequate justification for the lag.

It called on the company to present a lawful justification and barred it from any repeat of the practice.

$1 = 302.87 forints Reporting by Gergely Szakacs; Editing by Jan Harvey

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