By Jean Christou
THE SECURITIES and Exchange Commission (SEC) said yesterday there was nothing it could do to force the Cyprus Stock Exchange (CSE) board to carry out its recommendation to suspend trading in GlobalSoft shares.
SEC President Marios Clerides told the Cyprus Mailthat his body did not have any authority over the CSE – both are semi-government bodies – and could not therefore force GlobalSoft from the trading floor.
On Tuesday, the SEC recommended the suspension of trading in GlobalSoft shares, pending an investigation into alleged breaches of stock exchange regulations.
An SEC announcement said the commission had on Monday examined a report by independent auditors into the company’s stock market dealings and was as a result recommending suspension.
GlobalSoft has been trading under a separate category and on certain conditions regarding share price fluctuation for almost a month after being suspended from trading for a while in early October.
Regulators started investigating GlobalSoft after American authorities launched their own inquiry into AremisSoft, its US affiliate, earlier this year.
Former AremisSoft executives had their bank and broker assets frozen by a US federal court in October amid allegations the company had overstated revenues and inflated the value of customer contracts and acquisitions.
AremisSoft owns some seven per cent of the Cypriot concern. One of the former AremisSoft executives cited in the US lawsuit, Lycourgos Kyprianou, is chairman of GlobalSoft.
GlobalSoft was allowed to return to the floor in mid November under certain conditions, which included filing weekly reports on its trading activities.
But the CSE board on Wednesday refused to approve the SEC request for suspension, citing lack of available evidence.
” There is nothing we can do,”Clerides said, commenting on what further action the SEC could take. He added that if eventually the CSE became a private concern, it could be brought under the direct supervision of the SEC.
Referring to the recommendation to suspend GlobalSoft, Clerides said it was not a penalty against the company.
” A lot of people think it’s a penalty but it’s not that,”he said. ” It’s a move to protect investors.”
In a brief but terse announcement yesterday, GlobalSoft said: ” Irrespective of our bitterness at the thoughtless and legally reprehensive announcement of the Securities and Exchange Commission (SEC), in respect of which we reserve our right to react as a company, we would like to declare that we have started the implementation of our new strategy, as announced on 11/12/2001.”
GlobalSoft shares ended almost one cent down yesterday at 15 cents while the technology sector fell 0.64 per cent.
All market indices fell yesterday, with investors appearing to be in low- confidence mode. Losses ranged from 0.32 per cent in the construction sector to 2.74 per cent in the tourism sector. Bank stocks fell 1.39 per cent.
all-share index ended the day 1.15 per cent down at 136.5 points while the blue chip FTSE/CySE index shed 1.12 per cent to 538 points. Only 24 titles recorded gains compared to 76 decliners and 42 which closed unchanged
