Regarding the Ruling of the Supreme Administrative Court of Lithuania

ŽEMAITIJOS PIENAS, AB  (hereinafter referred to as ‘the Company’) informs that, on 12 January 2022, the Supreme Administrative Court of Lithuania heard an administrative case further to the appeals of the Company and the Bank of Lithuania regarding annulment of the decision of 8 July 2021 of Vilnius Regional Administrative Court in the case regarding the decision of the Bank of Lithuania No. 241-38 “Regarding application of enforcement measures against ŽEMAITIJOS PIENAS, AB ”, dated 28 February 2018 (hereinafter referred to as ‘the Decision of the Bank of Lithuania’). By ruling of 12 January 2022, the Court upheld the Company’s appeal in part and amended the decision of the Vilnius Regional Administrative Court of 8 July 2021 by annulling a part of the decision in which the Company was declared in violation of provisions of Article 22(3) of the Law on Securities of the Republic of Lithuania due to providing false information in its annual information of 2016 as regards the adherence to the provisions (recommendations) under Item 7.1 of the Corporate Governance Code for the Companies Listed on AB Nasdaq Vilnius (hereinafter referred to as ‘the Code’). The appeal lodged by the Bank of Lithuania was dismissed by the Court in full scope.

The Court found that the Bank of Lithuania failed to prove that the Company had not complied with the recommendation under Item 7.1 of Principle VII of the Code during the period of the dispute, and that the court of first instance did not appropriately assess the case circumstances in this part, therefore, the parts of the decision of Vilnius Regional Administrative Court and the Decision of the Bank of Lithuania whereby the Company was declared in violation of said provisions of the Code have been annulled as unjustified.

The Court left to stand the operative part of the decision of 8 July 2021 of Vilnius Regional Administrative Court to the extent the fine imposed on the Company by the Decision of the Bank of Lithuania was reduced. The Court ruled that the reduced amount of the fine was proportionate to the violations found and that there were no grounds to further reduce it.

As previously communicated by the Company, by decision of 8 July 2021, Vilnius Regional Administrative Court upheld the appeal of the Company in part and reduced the fine imposed by Director of the Supervision Service of the Bank of Lithuania by decision of 28 February 2018 of the Bank of Lithuania to EUR 125,000. The remaining part of the appeal was dismissed.

The above-mentioned ruling is final and not subject to appeal; therefore, the Company intends to pay the fine imposed on it.

Arnas Matuzas,
Head of the Legal Department

 +370 444 22308