- Wednesday, October 16, 2024
France's financial market regulator, the AMF, has imposed a significant fine on Rallye and its Chief Executive, Franck Hattab, for disseminating false or misleading information regarding the company's financial position. The regulator found that Rallye had provided inaccurate information on 11 occasions between March 2018 and May 2019, including its 2017 annual results, 2018 half-year results, and 2018 annual results.
By spreading this false or misleading information, Rallye created a more positive perception of its liquidity than was actually warranted. As a consequence, the company's share price was artificially elevated, leading to an abnormal valuation.
The AMF's enforcement committee decided on September 7 to fine Rallye €25 million ($26.6 million), while Chief Executive Franck Hattab received a separate penalty of €1 million. Rallye has not yet responded to the regulator's decision, and Franck Hattab was unavailable for comment at the time of writing. However, an appeal may be lodged against the ruling.
Rallye serves as the holding company for the troubled French grocer, Casino Guichard-Perrachon, of which it owns a 51.7% stake. The AMF noted that Rallye's liquidity position was closely tied to the volatile Casino share price, a factor that was not adequately conveyed in Rallye's financial communications.
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