Unraveling the Univid Controversy: A Review of the Oslo Stock Exchange’s Actions

Unraveling the Univid Controversy: A Review of the Oslo Stock Exchange’s Actions

The Univid Controversy

Univid, formerly known as DLTX, is under fire due to a series of significant financial discrepancies and questionable strategic choices. However, the focus of the criticism is not solely on Univid but also on the Oslo Stock Exchange. Investment Director Robert Næss has publicly criticized the exchange for its handling of the situation, arguing that it should have imposed stricter sanctions on Univid.

Univid’s Downfall

The issues with Univid include the hasty sale of subsidiary companies and considerable accounting errors. The most worrying of these errors was the company’s failure to provide adequate evidence to support all the listed values in its report for the last quarter of the previous year. This led to the exchange labeling the company’s actions as “highly criticizable”. The report also revealed that auditors could not endorse NOK 150 million (approximately USD 17 million) of the company’s assets. Furthermore, Univid has been operating at a loss every year since its listing on the stock exchange, amounting to a total loss of around NOK 1 billion (approximately USD 112 million).

Oslo Stock Exchange’s Response

Despite the severity of these issues, the Oslo Stock Exchange did not enforce stricter sanctions against Univid. In response to criticism, Oslo Stock Exchange Director Øivind Amundsen asserted that the exchange regularly monitors companies that have undergone significant changes and seem “empty.” He also clarified that the exchange does not have the authority to downgrade a company from the main list to another marketplace. Such a downgrade would have to be initiated by the company itself, which would then need to apply for listing on a different marketplace.

Possible Investigation by the Financial Supervisory Authority

NHH researcher Finn Kinserdal suggests that the Financial Supervisory Authority may need to investigate the issues surrounding Univid. The scale of these issues, coupled with poor internal control, lack of expertise, and large numbers, is a cause for concern. The authority may be required to scrutinize the company’s actions to ensure its compliance with financial regulations.

A Cautionary Tale for Investors

Given Univid’s historical figures and the difficulties in identifying value in its portfolio companies, Investment Director Robert Næss recommends that most investors should steer clear of the company. He suggests that only investors with a thorough understanding of Univid and its portfolio companies should consider investing. The Univid controversy serves as a reminder for investors to conduct thorough due diligence before investing in a company, especially in volatile markets.