Geely may be fined, Daimler stake needed earlier disclosure

FRANKFURT/BERLIN German markets regulator BaFin is reviewing whether to impose fines after it found that transactions to buy a 9.69 per cent stake in Daimler on behalf of Mr Li Shufu, chairman of Chinese carmaker Geely, should have been disclosed earlier.

He disclosed on Feb 23 that he had amassed a US$9 billion (S$12 billion) investment in Daimler using banks, shell companies and derivatives.

Mr Li, who controls carmaker Volvo, revealed he had control over almost 10 per cent in rival Daimler, parent company of Mercedes-Benz, though German rules require investors to reveal if their stake exceeds the 3 per cent, 5 per cent and 10 per cent thresholds.

"Voting rights disclosures by Shufu to Daimler should have been reported on Feb 22," BaFin said on Saturday.

It said the regulatory disclosures have since been amended to reflect the earlier date of Feb 22 rather than Feb 23.

The maximum fine to be paid by private individuals who violate disclosure rules could be €2 million (S$3.2 million), and for companies €10 million, or 5 per cent of annual revenue.

BaFin had asked investment bank Morgan Stanley to correct a disclosure filing, according to a letter from Germany's Finance Ministry.

Morgan Stanley, which held Daimler voting rights that would later pass on to Mr Li, has amended its disclosure filing to reflect the new date, the letter said.

Morgan Stanley was part of a group of banks that helped Mr Li buy a stake in German carmaker Daimler in a way that helped avoid early disclosure. BaFin is investigating whether Mr Li broke disclosure rules.- REUTERS