{ "docId": "019dd923-622c-750b-8b96-6d03b12e1d18", "docSlug": "cfe5ee328183", "documentTitle": "Stroer SE & Co. KGaA (SAX)", "authorId": "51_Muddy_Waters", "authorName": "Carson C. Block", "documentKindSlug": "research-note", "documentKindLabel": "Research note", "sourceTypeSlug": "short_seller", "sourceTypeLabel": "Short seller", "presentationDate": "2016-04-21 00:00:00", "orientation": "portrait", "aspectRatio": 0.77272725, "pageNumber": 29, "pageCount": 62, "prevPage": 28, "nextPage": 30, "slideType": "appendix_disclosure", "function": "expose_contradiction", "density": "overcrowded", "nDataPoints": 6, "notes": "The slide uses a narrative structure to expose potential regulatory arbitrage or non-compliance regarding disclosure thresholds.", "elementsJson": [ "bullet_list", "paragraph", "footnote" ], "metadataConfidence": 0.9, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b96-6d03b12e1d18/29", "deckHref": "/decks/019dd923-622c-750b-8b96-6d03b12e1d18", "deckJsonHref": "/decks/019dd923-622c-750b-8b96-6d03b12e1d18.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b96-6d03b12e1d18#slide-29", "components": [ { "bbox": null, "kind": "callout", "text": "Six days before the law change that greatly increased the penalty for non-disclosure of voting rights, on 20 November 2015, MV disposed of its shares in Ströer entirely and GTH disposed of its call options.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-3f3e-76f7-b9e1-8099aa263143", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.72, "x": 0.14, "y": 0.09 }, "kind": "list", "text": "Is this a sign of greater ethical lapses or non-compliance by this person in conducting the company's business? Is there a greater cultural problem at the company that allowed these persons to remain in apparent violation of the law for an extended period of time?", "attrs": null, "subkind": "bullet", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "d4040967-980f-43ec-93e3-f69e5aec7ba3", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.78, "x": 0.11, "y": 0.67 }, "kind": "paragraph", "text": "Six days before the law change that greatly increased the penalty for non-disclosure of voting rights, on 20 November 2015, MV disposed of its shares in Ströer entirely and GTH disposed of its call options.88 It appears that Allianz might have acquired a few of the options and exercised them on the very same day.89 We do not know what happened to these shares. However, it cannot be excluded that a person a person close to (but not controlled by)", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "0113a859-bc8d-47bf-acb9-0f2889b873b8", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.18, "w": 0.78, "x": 0.11, "y": 0.21 }, "kind": "paragraph", "text": "German law provides for two separate minimum disclosure thresholds with respect to voting rights notifications – 3% for stocks and 5% for other financial instruments. The deadline for filing a voting right notification with respect to such financial instruments is four trading days at the latest. Any non-compliance of the obligation to notify voting rights resulting out of financial instruments other than stock could—under the old legal regime—only be fined with a penalty of up to €1 million. Under the new regime that took effect on 26 November 2015, non-compliance may also lead to a loss of rights associated with the stocks held by the relevant person in the respective issuer, i.e. if a shareholder of a stock corporation does not disclose his other financial instruments in such corporation, he might lose the dividend and voting rights arising out of such stocks.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "32bf74c1-5376-4638-9957-824995ed91c8", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.11, "w": 0.78, "x": 0.11, "y": 0.54 }, "kind": "paragraph", "text": "While it appeared that MV kept 3,385,773 (6.93%) voting rights, on 3 June 2013 MV had in fact sold 3,385,773 call options to a Dutch holding company called Green Towers Holding, B.V. (GTH). GTH itself is controlled by Dacapo 2 GmbH83, which is controlled by Avalanche GmbH, which, finally, is controlled by Matthias Rumpelhardt.84,85,86,87 Due to such control, the very same voting rights are also attributable to the controlling shareholders under the applicable German disclosure law.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "95dd1f46-41c9-4667-b8a3-9ecfad55027b", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.78, "x": 0.11, "y": 0.44 }, "kind": "paragraph", "text": "Media Ventures (“MV”), the investment company owned by Dirk Ströer (51%) and Udo Müller (49%), acquired 6,771,546 shares in the Ströer company on 3 June 2013 after a share increase to finance the acquisition of freeXmedia, Ströer Interactive, and Business Advertising. On 25 June 2013, MV apparently sold half of its shares to Ströer (now Delphi) Beteiligungsgesellschaft GmbH, which is controlled by Dirk Ströer.82", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "c33442ee-bc0f-4dc9-adf2-76e2d6770eb8", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.1, "w": 0.78, "x": 0.11, "y": 0.79 }, "kind": "source-note", "text": "82-89 Footnotes detailing sources for the transactions and corporate control structures.", "attrs": null, "subkind": null, "toolName": null, "toolSlug": null, "confidence": null, "componentId": "1b67ec70-44e0-437d-bc89-a5b51a54521a", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.02, "w": 0.32, "x": 0.11, "y": 0.41 }, "kind": "title", "text": "Müller's Daisy Chaining of Rights", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "4b6404d7-dc58-4e38-9608-c0c6e959fc2e", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.02, "w": 0.12, "x": 0.11, "y": 0.18 }, "kind": "title", "text": "Background", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "4d86a824-4a0e-4c5f-8fbf-754000deb3f3", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [ { "name": "Logical chain", "slug": "logical-chain", "agent": null, "layer": "slide", "matchId": "5cbdc5b9-864e-44c2-a43e-86a30d292d0b", "evidence": "The text presents a series of connected events and agreements.", "confidence": 0.6 }, { "name": "Narrative foundations (from the Storymakers methodology)", "slug": "narrative-foundations", "agent": "storyteller", "layer": "slide", "matchId": "644e6c9d-396e-49a3-8498-7dde36b1daf8", "evidence": "The use of storytelling elements to present the argument.", "confidence": 0.6 } ], "frameworks": [], "arcBeats": [ { "to": 40, "from": 3, "beatId": "b3f52913-eba1-4212-8b6a-c784e421d7c9", "arcName": "Overcoming the Monster", "arcSlug": "overcoming-monster", "beatName": "Expose Contradiction", "beatSlug": null, "evidence": "Multiple sections expose contradictions in Ströer's financial reporting and governance.", "position": 0, "confidence": 0.8, "parentBeatName": null, "parentBeatSlug": null }, { "to": 62, "from": 20, "beatId": "3171857b-3930-46f5-9955-6defb6a606d6", "arcName": "Overcoming the Monster", "arcSlug": "overcoming-monster", "beatName": "Appendix Disclosure", "beatSlug": null, "evidence": "Appendices provide detailed disclosures supporting the critique.", "position": 1, "confidence": 0.8, "parentBeatName": null, "parentBeatSlug": null } ], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }