(Bloomberg) -- Poland’s financial regulator is seeking to speed up approvals for companies planning initial public offerings to help lure back issuers to the country.
The regulator KNF is in touch with the Warsaw bourse and the investment community to introduce a faster and more efficient process of accepting IPO prospectuses, Chairman Jacek Jastrzebski said on Friday. Poland operates the largest stock exchange in eastern Europe but access to it has been marred by lengthy procedures.
In recent years, an increasing number of new issuers, including Zabka Group SA, have picked Luxembourg as their country of domicile even though they operate mostly in Poland and choose Warsaw as their trading venue. Croat grocery chain Studenac, which this month said it plans to debut in Warsaw, filed its prospectus with the Luxembourg regulator.
“We need to amend our procedures to make issuers willing to access the Polish market using the Polish regulatory channel,” Jastrzebski told a conference in Warsaw. Improving IPO procedures would also help better protect the interests of Polish investors and boost the market’s transparency, he said.
The fallout from a regulatory arbitrage became particularly apparent when Ukrainian agricultural company Kernel Holding SA, listed in Warsaw and registered in Luxembourg, sparked an outcry among minority investors last year over a controversial buyout bid and a big share sale. Luxembourg rules, contrary to Polish regulations, allowed Kernel to proceed without seeking shareholder approval.
Polish convenience store chain Zabka, whose recent $1.6 billion IPO was the biggest for the Warsaw bourse in four years, is also registered in Luxembourg. The company said in its issue prospectus that “the exercise of certain shareholder rights for non-Luxembourg investors in a Luxembourg company may be more difficult and costly than the exercise of rights in a Polish company.”
Zabka also warned in the same document that it may be “difficult or impossible to enforce rights against the company that may be common in other jurisdictions.”
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