Echo Polska shares slump 20% on Polish arrest
Echo Polska Properties’s (EPP’s) JSE-listed shares slumped 20.1% to close at R13.95 on Wednesday, after authorities detained a nonexecutive director in Poland.
Przemyslaw Krych, Echo Polska’s nonexecutive director and CEO of related company Griffin Real Estate, is being detained by Poland’s Central Anticorruption Bureau.
Krych said via his attorneys: "I have not committed any crime and intend to prove my innocence in a manner resulting from the law."
Echo Polska, the Polish-invested real estate company, said it did not know "the content of the charges alleged against Krych" as the matter was being heard behind closed doors.
"If it is established that these charges relate to activities involving the company’s business, the company will conduct an independent investigation and take any other actions as it deems necessary to ensure the protection of the interests of the company and its shareholders," Echo Polska said.
The company said its board was confident that its corporate governance policies and procedures were "robust" and had its adhered to "best business and governance principles".
The share price of Redefine Properties, which owns 39.6% of Echo Polska, fell 5% to R10.35. A Redefine spokesman said while details of the allegations were limited, "we are given to understand that the investigation relates to Mr Krych in his personal capacity and not as a nonexecutive director of EPP".
As a nonexecutive director, Krych was not involved in Echo Polska’s day-to-day activities.
Redefine was "confident with the levels of corporate governance that are applied within EPP and have no reason to believe that there are any transactions, to which EPP is a party, that have in any manner transgressed the law".
Redefine had requested Echo Polska "to procure Mr Krych’s resignation as a nonexecutive director of EPP".