Regal Petroleum fined £600,000 for Greek farce

17th Nov 2009 07:59

Oil explorer Regal Petroleum has been fined £600,000 by the AIM Disciplinary Committee for issuing misleading information over its Kallirachi prospect in Greece four years ago.The ADC said statements which Regal released between 2003 and 2005 claiming Kallirachi contained up to 227m barrels of oil were poorly founded and that the company was slow in telling investors when the prospect in fact contained nothing.The ADC concluded that Regal "failed to take reasonable care to ensure that" stock market statements were "not misleading, false or deceptive". Statements from Regal were "consistently over-optimistic" and "used language that created a misleading impression as to the potential commercial viability of Kallirachi", the committee found. Some eleven market announcements were deemed by the ADC to be "serious" breaches of AIM rules.The news that Kallirachi was dry came just days after Regal raised £45m through a rights issue. The shares crashed by more than 60% when the news finally came out and founder and major shareholder Frank Timis was forced to resign as chairman."The number, nature and duration of the breaches demonstrate a systematic pattern of conduct evidencing a reckless disregard for the AIM Rules by Regal," said the ADC.Regal has been through several managerial changes since 2005 and the new team in charge were quick to distance themselves from their predecessors after the ADC ruling.In a statement, Regal said it was disappointed at the outcome of the LSE probe but added it was pleased to put the matter behind it."At no point has it been suggested that any of the current management team have conducted their responsibilities in anything other than a proper and professional manner," the company said.Frank Timis is still Regal's second-largest investor with 8.8% of the shares but has an agreement that precludes him from interfering in the running of the company.