A Tuesday inquiry by the Dutch financial markets watchdog found that Goldman Sachs (GS.N) maintained a substantial gross short position in healthcare equipment producer Philips (PHG.AS) on Aug. 14, counterbalancing a previously stated bullish position.
No wrongdoing was alleged. The Financial Markets Authority (AFM) is investigating how investment company Exor NV (EXOR.AS) acquired a 15% interest in Philips in an unexpected move on Aug. 14 without disclosing its stake-building.
Goldman Sachs, representing Exor, denied comment.
The regulator said the probe “has led to the additional disclosures of gross short positions by Goldman Sachs in the AFM register” in an e-mail. On Friday, the Dutch newspaper FD published the fresh disclosures to the registry.
Philips and most stockholders applauded Exor’s investment, although others questioned how it was bought so rapidly. Dutch market laws demand disclosures for investors with 3%, 5%, or 10% stake in public companies.
Philips said that a bank had created most of Exor’s position through derivatives but could not disclose more. A Philips representative said Monday the business had no further comment.
On Tuesday, an Exor spokeswoman reiterated that the Aug. 14 transaction followed market regulations.
U.S. Securities and Exchange Commission reports indicated Exor held 2.99% of Philips on June 30, barely below the Dutch disclosure requirement.
As of Aug. 14, Goldman Sachs had 12.17% of Philips, predominantly call options, according to an Aug. 17 AFM filing. A new disclosure shows Goldman had a 12.04% indirect short position on Aug. 14.
That would allow Goldman Sachs to execute either side of the deal, in this instance, the “buy” side, for its customer, but it is unclear what it did.
The AFM said it was talking to “market parties and relevant stakeholders” to assess whether additional regulations or recommendations are required concerning transaction structures that allow big holdings to be quickly acquired in publicly listed businesses.
Comment Template