Resolution no. 21004

Suspension, pursuant to art. 99, paragraph 1, letter b), of legislative decree n. 58/1998, of the offer to the Italian public carried out by Lonza Group S.r.l. including through the website www.lonzainvestments.com concerning financial investments

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

HAVING REGARD TO Law no. 216 of 7 June 1974 and subsequent amendments and additions;

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

HAVING ESTABLISHED that evidence acquired through supervisory activity undertaken by CONSOB has revealed activity consisting of offering, including through the website www.lonzainvestments.com, residents in Italy “high return investments in England”;

HAVING ESTABLISHED, in fact, that the checks carried out showed that the website www.lonzainvestments.com, , which is active, available in Italian and traceable to the company named Lonza Group S.r.l. with registered office in Trieste, promises users the ability to subscribe to contracts concerning “loan notes connected to the real estate world and issued by solid and reliable developers” who would guarantee returns related to the amount of capital invested and the duration of the investment";

HAVING ESTABLISHED that, according to what is reported within the website, the "loan notes", issued by unspecified foreign companies to finance the construction of the alleged real estate projects, “consist in a loan contract between an issuer and a member specifying when and how the sums lent along with the anticipated profits should be repaid”;

HAVING ESTABLISHED , therefore, that the company Lonza Group S.r.l. would offer the Italian public the subscription of investment contracts concerning “loan notes” issued by third party companies;

HAVING ESTABLISHED that the “Investments” section of the website offers the following investments, characterised according to the amount of capital initially required, returns envisaged and horizon envisaged: a) “loan notes, always linked to the real estate world, issues by a solid English construction company” which envisages a minimum initial investment of 20,000 euros and expects a yield of 18% per annum and a duration of 18 months; b) “Investment of € 24,900: 34.55% in 24 months”; c) “ €250 net per month to supplement your revenue by investing only €24,900 ”; d) “Investment of € 27,500: up to 22% per annum”;

HAVING ESTABLISHED that in the section “How does it work?” the website analytically illustrates the investment procedure divided into nine steps which envisage, among other things, the user’s registration, “free advice”, the choice of the “tailored” investment, the start of the purchasing process, the anti-money laundering check, the execution of a bank transfer and the subsequent stipulation of the contract;

HAVING ESTABLISHED that the investment possibilities described above are also promoted through the organisation in Italy of conferences and seminars advertised within the website www.lonzainvestments.com;

CONSIDERING that, in the face of requests for information addressed to it - with which attention was also called to the fact that the activity in question is potentially liable to constitute a public offering of financial products - the company Lonza Group S.r.l did not provide the documentary information with regards to any measures possibly taken in order to avoid violations of the legislation on public offerings;

HAVING ESTABLISHED that the operation is presented as an investment opportunity;

HAVING REGARD to the fact that, according to the definition under art. 1, par. 1, Letter t) of Leg. Decree no. 58/1998, “offer of financial products to the public” 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 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 constituting the offering to the public can be summed up as follows:

a) the fact that the activity concerns “financial products”, a category that includes - pursuant to art. 1, paragraph 1, letter u) of Legislative Decree no. 58/1998 - both the 'standardised’ figures of ‘financial instruments’ and ‘any other form of investment of a financial nature’;

b) performance of communication activities aimed at having one acquire or subscribe to the financial products and, consequently, including at the very least a description of their main characteristics;

c) the fact that the communication in question is addressed to the Italian public;

HAVING CONSIDERED that the notion of ‘investment of a financial nature’ implies the coexistence of the following three elements: (i) the investment of capital; (ii) the expectation of financial return; (iii) the assumption of a risk directly connected and related to the investment of capital;

HAVING ESTABLISHED that the structure of the operation in questionprovides that (a) the member uses his/her own capital for the subscription of the contracts concerning the "loan notes" issued by foreign companies; (b) by virtue of the aforementioned contract a variable return in relation to the capital invested and the time horizon chosen is promised; (c) with consequent assumption of a risk related to the use of the capital invested;

HAVING ESTABLISHED, therefore, that the aforementioned return would be paid against the use of the investor’s capital;

HAVING CONSIDERED, therefore, that the reason for the contract in question can be attributed to the production of a financial return consisting of consideration of the use of capital granted by the recipients of this return, who, therefore, invest his/her own money with the expectation of profit;

HAVING CONSIDERED, therefore, that - with regard to the existence of the requirement referred to in letter a), i.e. the subject of the offer can be classified as a ‘financial instrument’ - the trading proposals offered, including via the website www.lonzainvestments.com , based on what has been illustrated, do appear to have the characteristics of “an investment of a financial nature”;

HAVING ESTABLISHED that the aforesaid informative content provides a representation in standardised terms of the characteristics of the investment proposals, suitable to render investors able to assess whether or not to join the initiative;

HAVING ESTABLISHED therefore, that the requirement set out in letter b) is met;

HAVING ESTABLISHED, furthermore, that there are unequivocal indications that the offer concerned is addressed to the public resident in Italy. In fact, it should be pointed out that (i) the company Lonza Group S.r.l. operates as a subject proposing the investment; (ii) the website www.lonzainvestments.com, attributable to the aforesaid company, is in Italian; (iii) the company Lonza Group S.r.l. organises events and conferences in Italy aimed at potential Italian investors;

HAVING ESTABLISHED therefore, that the requirement set out in letter c) is also met, since the offering in question is aimed at the public resident in Italy;

HAVING CONSIDERED, however, that the business set up by the subject in question has the characteristics of an offer of financial instruments to the public as defined above;

HAVING ESTABLISHED that the offering in question, on the basis of current evidence, does not qualify for any of the exemptions - contemplated by the combined provisions of art. 100 of Legislative Decree no. 58/98 and art. 34-ter of CONSOB Regulation no. 11971/98 - from enforcement of the rules on ‘solicitation of public savings’;

HAVING REGARD TO Art. 94, para. 1, of Legislative Decree no. 58/98, pursuant to which ‘Anyone intending to make an offer to the public must 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 offer in question, neither prior notification nor the information prospectus intended for publication were sent to CONSOB;

HAVING CONSIDERED, therefore, that there are the grounds for suspecting the promotion of a public offer of financial products in infringement of the relevant laws and regulations;

HAVING ESTABLISHED that the public offering of these financial products is ongoing;

HAVING REGARD TO art. 99, par. 1, letter b) of Leg. Decree no. 58/98, according to which CONSOB “can, by way of a precaution, suspend, for a period of up to ninety days any offer of products other than those referred to in Letter a) [i.e. European financial instruments], if there are grounds for suspecting the infringement of the provisions of this paragraph [that regulates the public offer of financial products] or of the relative implementing regulations”;

HAVING CONSIDERED that, given the above-mentioned circumstances, the provision identified above must be adopted with urgency;

HEREBY RESOLVES:

As a precautionary measure, to suspend for a period of 90 days, the offering of financial instruments to the public resident in Italy for investments of a financial nature promoted by Lonza Group S.r.l. including through the website www.lonzainvestments.com

This Resolution shall be brought to the attention of those whom it concerns and will be published in the CONSOB Bulletin.

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

July 17, 2019

THE CHAIRMAN
Paolo Savona