Resolution no. 20953

Suspension, pursuant to Article 99, paragraph 1, letter a) of Legislative Decree no. 58/1998, of the offering of shares to the Italian public promoted by Solar Group Limited through the https://solargroup.pro website

LA COMMISSIONE NAZIONALE PER LE SOCIETÀ E LA BORSA
[THE NATIONAL COMMISSION FOR COMPANIES AND THE STOCK EXCHANGE]

HAVING REAGARD to Law no. 216 of June 7, 1974, and subsequent amendments and additions;

HAVING REGARD TO Legislative Decree no. 58 of February 24, 1998, and subsequent amendments and additions (‘Consolidated Law on Finance’);

HAVING ESTABLISHED that, following supervision by CONSOB, evidence has been acquired of an activity consisting in offering, including to Italian residents, the opportunity to invest money in the purchase of shares (called quote in Italian) through the https://solargroup.pro website, which is also available in Italian;

HAVING FOUND that in the homepage of the said website we read that Solar Group Limited, with office in Vanuatu, promises an ‘investment project’ aimed at the ‘developing and producing the most effective induction motors in the world’;

HAVING FOUND that in the ‘Client Agreement’ available for download on the website we read that Solar Group Limited would provide investment services to clients that have opened an account ‘to trade in financial instruments’;

HAVING FOUND that, following registration to the https://solargroup.pro website, the user can access the website reserved area, where they can buy at a discount price different ‘investment packages’ that would entitled the user to receive a certain quantity of ‘investment shares’;

HAVING CONSIDERED that in the ‘Invest’ subsection a list is found of ‘investment shares’ with a minimum value of 500 dollars and a maximum value of 50,000 dollars, and that these investment shares can also be bought by instalments;

HAVING FOUND that, in this regard, the ‘FAQs’ section specifies that:

• ‘The minimum investment is 50 dollars [consisting in] payment by 10 monthly instalments monthly a 500 dollar package of shares’;
• ‘to purchase the company’s shares, you must fill the balance of your account’;
• ‘a system of penalties is provided for serious, unreasonable delay in the payment of instalments’;
• ‘if you do not pay all instalments, you will anyway get the company’s shares for the amount that you have already effectively transferred on account for purchasing the shares the rate in this case will be much lower than the rate indicated for choosing the investment package’;
• ‘the investment phase is a period of several months during which a certain rate is establish for the purchase of shares. At each new investment phase, the company’s shares are be sold in a more expensive way’;

HAVING FOUND, therefore, that these offerings are characterised by share packages the subscription of which requires the payment of an amount of money, and that each different amount paid entails the purchase of a different number of shares through the account that the user opened on line;

CONSIDERING that the ‘Documents’ subsection of the https://solargroup.pro website allows the registered investor to download and sign the ‘Investment Agreement’ (in English and Russian), in which it is specified that the agreement stipulated between the parties has as its subject the purchase of shares defined as ‘a package of shares of Solar Group Limited’;

HAVING FOUND that, in this regard, the aforementioned document envisages that the so-called ‘Investment Agreement’ must be concluded between Solar Group Limited (the ‘Investment Recipient or the company’) and the client (‘the investor’) who has accessed and registered into a reserved area of the website, and that Solar Group Limited must transfer the shares on the client’s account (‘After providing the Investment in accordance with the conditions of the present Agreement, the Investment Recipient undertakes to transfer to the Investor the ownership of the unencumbered Shares which are not the subject of the claim of the third parties’);

HAVONG NOTED also that the shares transferred to clients give them patrimonial rights (‘the Investment recipient undertakes to pay the investor the income from the profit that the Investment Recipient gets in proportion to the number of shares the investor possesses. The profitability per share is calculated as the sum of the company's profit divided by the amount of the shares credited by the Company’);

HAVING CONSIDERED that the purchase of shares requires the client to pay money exclusively by using the payment services available in the reserved area of website in question;

HAVING REGARD TO the fact that, according to the definition under Art. 1, para. 1, letter t) of Leg. Decree no. 58/1998, an ‘public offer of financial products’ must be understood to mean ‘any communication made to people, in any form and by any means, that presents sufficient information about the conditions of the offer and the financial products offered so as to render an investor capable of deciding to buy or underwrite such financial products, including placement by means of licensed bodies’;

HAVING CONSIDERED that the elements of the public offering that are relevant for the purposes of this provision can be summarised as follows:

a) the fact that the activity involves a specific or several specific ‘financial products’, a category that includes - pursuant to Art. 1, para. 1, letter u), of the Consolidated Law on Finance, both the typified characteristics of ‘financial instruments’ and ‘every other form of investment of a financial nature’;

b) b) the existence of communication intended to persuade investors to purchase or subscribe to these financial products and, consequently, including at the very least a description of their main characteristics and essential terms and conditions;

c) the representation of the offer in uniform and standardised terms and the consequent impossibility for the individual investor to intervene in the formation of the contractual agreement and on the subsequent use of the money paid;

d) the fact that the offer in question is directed towards Italian residents;

HAVING FOUND that the investor who registers on the https://solargroup.pro website and thus accesses the reserved area of can subscribe shares in the capital of a Solar Group Limited by paying money through the payment systems available therein, and that the investor thereby becomes a ‘co-owner of the company’, as he/she becomes the holder of shares with proprietary rights such as the right to receive ‘dividends according to the number of your company shares’;

HAVING CONSIDERED therefore, that the subject of the purchase proposal should be considered as a shareholding and thus as a transferable security pursuant to Art. 1, para. 1-bis, letter a) of the Consolidated Law on Finance, and therefore as a financial instrument;

HAVING CONSIDERING therefore, that once the requirement under letter a) is met, the shares offered by Solar Group Limited appear to fall under the concept of financial instrument;

HAVING FOUND that in the website in question and in its reserved section the company has published information on the shares and documents such as the ‘Investment Agreement’ which describe the essential characteristics of the trading proposal (such as the characteristics of the various share packages with the number of shares and the money to be paid to subscribe them, information on the company offering the shares and on the company to which they belong);

HAVING ESTABLISHED that the scheme is promoted in standardised and uniform terms and, in particular, it is presented in such a way as to render investors capable of evaluating whether to subscribe to it or not;

HAVING FOUND therefore, that the offering requirements set out in letters b) and c) are met;

HAVING FOUND that the offering of shares by Solar Group Limited on the https://solargroup.pro website is addressed to the public resident in Italy, as: i) the contents of the website are also available in Italian; ii) there are no mechanisms in place to prevent registration of Italian users;

CONSIDERING therefore, that the requirement set out in letter d) is also met, since the offering at issue is addressed to the Italian public;

CONSIDERING therefore that the activity carried out by Solar Group Limited, aimed at offering company’ shares for investment, has the characteristics of an offering of financial products to the Italian public, as defined above;

HAVING CONSIDERED that Art. 94, section 1, of the Consolidated Law on Finance establishes as follows: ‘Those who intend to make an offer to the public shall publish a prospectus in advance. To this end, for offers concerning EU financial instruments for which Italy is the Member State of origin and for offers of financial products other than EU financial instruments, prior notification must be sent to CONSOB including the prospectus intended for publication. The prospectus may not be published until it is approved by CONSOB’;

HAVING ESTABLISHED that, in relation to the activity described, neither prior notification nor the information prospectus intended for publication was sent to CONSOB;

HAVING ESTABLISHED, furthermore, that the offering in question, based on the evidence available, does not qualify for any type of exemption - according to the combined provisions of Art. 100 of Legislative Decree no. 58/1998 and Art. 34-ter of CONSOB’s Regulation no. 11971/1998 - from enforcement of the regulations on ‘solicitation of public savings’ under Art. 93-bis and subsequent additions and amendments of the Consolidated Law on Finance;

CONSIDERING therefore, that there is a well-founded suspicion about the promotion of a public offering of financial products in infringement of the relevant laws and regulations, and about such a public offering being still ongoing;

HAVING REGARD to Art. 99, para. 1, letter b), of the Consolidated Law on Finance, according to which CONSOB: ‘may, by way of a precaution, suspend any offering the object of which are EU financial instruments for a maximum period of ten working days each time, if there is the founded suspicion of the offering infringing the provisions of this paragraph or the relative implementing regulations’;

HAVING CONSIDERED that, given the existence of the above-mentioned conditions, there is the urgent need to apply the measure identified above;

HEREBY RESOLVES:

The precautionary suspension for 10 working days, of the offering of shares to Italian residents, promoted by Solar Group Limited through the https://solargroup.pro website.

This Resolution shall be brought to the attention of those concerned and published in CONSOB’s Bulletin.

This measure may be appealed before the Regional Administrative Court of Lazio within 60 days of the date of service.

June 4, 2019

THE CHAIRMAN
Paolo Savona