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AFM demands information for investors about Genmed

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Genmed B.V. (Genmed) has to provide more information to investors who have bought or intend to buy bonds. In addition, Genmed will have to rectify the information it has already provided. This is demanded by the Netherlands Authority for the Financial Markets (AFM) in an order for incremental penalty payments. The company did not comply with the order in full within the term set, and has to pay €4000 for each day it fails to comply in full with the order.

Genmed is not registered with the AFM. Genmed offers bonds in the Netherlands as referred to in the Financial Supervision Act (Wft). The total equivalent value of the offers amounted to less than €2,500,000 over a period of twelve months. This is the reason why a prospectus was not required.

Medicine

Since 2010 Genmed has offered investors the opportunity to loan money to the company by issuing bonds, i.e. the initial offer. Genmed used a brochure and a website (www.genmedobligaties.nl) for this initial offer. As described in this Genmed brochure, the funds raised are intended to finance the licence application and registration in several European countries of the generic medicines Amoxicillin, Ciprofloxacin, Ibuprofen, Diclofenac, Atorfasatin and Desloratadine.

Genmed has been offering bonds under the name "Genmed II Bedrijfsobligaties", the second offer, since January 2013. A brochure and a website (http://nl.genmed.nl/) are used for this purpose. As described in the Genmed brochure, the funds raised are intended for the development and registration of new generic medicines, the establishment of sales, marketing and promotional channels and to increase the operating capital.

The AFM initiated an investigation into Genmed because it provides investors with inaccurate or insufficient information. Genmed is required to disclose the following in writing to the relevant investors and publish it on its website:

What information is Genmed required to provide?

Information to be provided concerning the initial offer:

  • The manner in which Genmed spends the money laid in by the bond holders.
  • The moment at which Genmed was able to offer paracetamol.
  • The final orders for paracetamol.
  • Whether medicines were produced; whether there were proceeds from the sale of medicine.
  • Genmed's financial position.
  • Information on the parent company Genmed Holding Corporation, in connection with the possibility to seek recovery from this company.

Information to be provided concerning the second offer:

  • The production of paracetamol and Genmed's starting position and expectations for the future.
  • The production of medicine for Genmed and the proceeds from the sale of medicine.
  • Genmed's financial position.
  • Information on the parent company Genmed Holding Corporation, in connection with the possibility to seek recovery from this company.

Importance to investors

This information is important to investors who have bought and/or who may buy Genmed bonds. On the basis of this information they will be able to make a decision concerning the exercise of their contractual rights and will be able to make an informed decision about the possible purchase of bonds.

Failing to provide this information means that Genmed performed a trade practice that is unfair within the meaning of Section 6:193b and 6:193d of the Dutch Civil Code. This constitutes a violation of Article 8.8 of the Consumer Protection (Enforcement) Act.

Interested parties may submit the AFM's decision to the courts for review.

The AFM is committed to promoting fair and transparent financial markets.

As an independent market conduct authority, we contribute to a sustainable financial system and prosperity in the Netherlands.

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