Polish clothing retailer LPP, owner of brands including Sinsay, Reserved, Cropp, and Mohito, is facing financial penalties for failing to promptly disclose information about its exit from the Russian market in 2022, Polish website WNP.pl reported on 18 April.
The company is under investigation by Poland’s Financial Supervision Authority (KNF) for not immediately releasing sensitive information about the terms of selling its Russian subsidiary following Russia’s invasion of Ukraine.
LPP reportedly suspended operational activities in early March 2022, halted deliveries of new collections to stores, and began talks with local partner RE Trading OOO regarding the sale of assets.
According to WNP.pl, negotiations for the transaction took place in Dubai in April 2022 with the then-managing director of RE Trading, followed by discussions with Chinese consortium Far East Services FZCO in May.
The parties eventually agreed on a price of $135.5 million for 100% of shares in the Russian company.
The issue gained renewed attention when Hindenburg Research published a report two years after the Russian invasion, accusing LPP of only pretending to withdraw from business activities in Russia.
“In March 2024, company representatives rejected these allegations and threatened legal action,” the according to the report. The Financial Supervision Authority subsequently launched an official investigation against LPP.
The company has now announced it filed a request to the KNF on 24 February seeking “a ruling on the possibility of reaching an agreement regarding the conditions for extraordinary mitigation of sanctions.”
LPP’s main shareholder is the Semper Simul Foundation, which holds 31.19% of shares and 60.78% of voting rights. The company has been listed on the Warsaw Stock Exchange since January 2015 and is included in the WIG20 index.
LPP is not the first subject of Hindenburg Research’s investigations. In January 2023, its report on corporate governance abuses brought down the shares of the Indian conglomerate Adani Group, and its owner Gautam Adani lost $100 billion.
In May 2023, billionaire Carl Icahn lost $10 billion after the publication of a report by brokerage firm Hindenburg Research on the dividend scheme of his company Icahn Enterprises (IEP), which has signs of a pyramid scheme.
In early 2025, Hindenburg Research was reportedly closed.
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