Important notice

The Deputy Chairman of the Financial Supervision Commission (FSC), in charge of Investment Supervision Division has decided to execute a Coercive Administrative Procedure under article 118, paragraph 1, p. 1 and p. 4 from the Markets in Financial Instruments Act against BULGARIAN STOCK EXCHANGE – SOFIA JSC for the following:

 Oblige the BULGARIAN STOCK EXCHANGE – SOFIA JSC to hereby undertake the necessary actions, immediately, as a result from which, within an hour of receipt of this notice, to stop the trading of shares, emission ISIN BG1100028080, issued by MOUNTAIN PARADISE INVEST REIT (“Маунтин Парадайс Инвест” АДСИЦ) allowed to be traded as of this moment as a segment of the regulated market.”

The motives for this administrative procedure are as follows:

Thе legislation does not foresee for a legal mechanism for changing MOUNTAIN PARADISE INVEST REIT’s activities or for its conversion into another type of company. At the same time the license of the entity as a special purpose vehicle has been revoked, consequently it has no longer right to undertake the activities subject to its license. In this connection, MOUNTAIN PARADISE INVEST REIT has no longer legal and factual right to execute its investment goals, stated in its prospectus, namely to acquire investment properties, realize capital gains from their sale or lease, and to insure current income for the shareholders. The only legal possibility in the current situation is its liquidation.

On the other hand, following the decision of FSC dated 05.12.2012 for the revoking of MOUNTAIN PARADISE INVEST REIT’ license, the shares of the company, traded on the regulated market, organized by the BULGARIAN STOCK EXCHANGE – SOFIA JSC, are being traded actively. Following the date the license was revoked, the shares issued by MOUNTAIN PARADISE INVEST REIT, have been traded at a price much higher than their net book value as per their latest published financial statements.

The described actual situation creates conditions for destabilization of the market, which generates turnover on sales of shares in which prices frequently exceed their balance values. All this factors, taken together with the lack of perspectives for future development has threatened the interests of investors.

The prohibition of the trade on regulated market with financial instruments, issued by MOUNTAIN PARADISE INVEST REIT is necessary in order to preventively protect the interests of the investors. Therefore, it is necessary that the change of the shareholding structure of the company through deals on regulated market to be prohibited. Such deals presume that the company corresponds to definitive criteria, in relation to which it was allowed to be traded on this market, however, at the moment it does not comply with the requirements.

The initiation of the recent proceeding of Coercive Administrative Measure refers to provision of stability of the financial market and the prevention of significant unexpected financial losses from the side of the participants and the necessity of preventive protection of the investors’ interests.

The interested parties may present to FSC explanations and/or objections under the initiated proceeding until January 7, 2013.