Unpaid tax rumor rocks Elektrim stocks, possibly a manipulation scandal

Unconfirmed rumors circulating on the Warsaw Stock Exchange (WSE) that one of the largest WSE listed companies, Elektrim, owes as much as zl.2.7 billion in unpaid VAT taxes, caused massive fluctuations in Elektrim's stock price yesterday. The price of Elektrim shares plummeted by 10% within a few minutes, reaching zl.44. Yet before the stock exchange closed, prices recovered to zl 46. The hectic atmosphere was further heightened by the fact that Elektrim did not deny the rumors until late in the afternoon. According to stockbrokers, the story may prove the biggest stock manipulation ever in Poland. It is possible that the information was "released" by some investor planning to purchase Elektrim shares at a much lower price. Moreover, according to unconfirmed reports, two large foreign-owned brokerage houses did in fact buy a significant number of shares when the prices went down. The situation compelled Securities and Stock Exchange Commission (KPWiG) to look into the matter. It is also very likely Elektrim will turn to KPWiG asking it to investigate the influence of the information on its share price. Manipulation of share prices carries a prison sentence of up to three years and a fine of up to zl.5 million. (Gazeta Wyborcza, p.26) J.K.