LPP explains the allegations of operating in Russia. The president called a conference

LPP explains the allegations of operating in Russia.  The president called a conference

LPP and members of the management board have not planned and do not plan to return to operations on the Russian market – said the head of LPP. The company is facing the consequences of allegations of secretly continuing its operations in Russia. Due to the accusations made on Friday by the American intelligence agency Hinderburg Research, LPP shares fell by 30%.

The American intelligence agency Hindenburg Research accused the Polish clothing giant LPP of faking the sale of its business in Russia. Following these revelations, the company's shares saw a huge sell-off.

Hindenburg Research vs. LPP

LPP dissociated itself from cooperation with the buyer of Russian assets – a Chinese company that took advantage of the brand's recognition and continued to sell under the name Re (an association with Reserved). The fact is that under the signed contract, the buyer acquired the right to sell all goods intended for the Russian market. “The transaction therefore covered products that were in the company's warehouses and stationary stores located in Russia at the time of concluding the sales agreement, as well as those that were planned, ordered or already produced for the needs of the Russian market,” admitted the LPP press office. He argues that this was not tantamount to conducting business in Russia.

On Monday, a press conference was held by the president of LPP, Marek Piechocki, and vice-president Przemysław Lutkiewicz.

– I'm sorry, especially since we have to deal with this type of slander. I believe that everyone who lost due to this manipulation will quickly make up for it. Because the company has very good foundations and development prospects, said Marek Piechocki.

LPP disavows its operations in Russia

He added that LPP does not conduct any operational or commercial activities in Russia. – LPP sold the Russian business in June 2022. He does not own the Russian company and has no control over it. A Russian company sells goods in its own name and on its own account in Russia. This includes goods purchased under the interim agreement, said the company's president.

The company argues that under the sales agreement concluded in 2022, the Russian company – as a completely independent entity, sells goods in its own name and on its own account in Russia, including, among others, goods purchased under the so-called transition period. “According to the agreement, this is the time during which the investor will gradually take over complete independence over individual areas of the acquired enterprise's operations, including, among others: built his own team responsible for the purchase of goods, its distribution and IT systems.

The payment for the sale of the company, including the receivable from the stores in the amount of PLN 601 million – in accordance with the plan agreed with the investor – was divided into tranches. The transition period is planned to last until the end of 2026 and in no way means that LPP will conduct commercial activities in Russia. However, the Group intends to shorten this period,” it said in a statement.

LPP consistently argues that the report by the American intelligence agency “is part of an organized disinformation attack that has been prepared for five months and is aimed at reducing the price of the LPP Group's shares.” The company claims that it has informed the Ministry of Foreign Affairs and the National Tax Administration about the matter.

Who is Hindenburg Research?

Hindenburg Research is a New York-based financial analysis and investing company. An important area of ​​its activity are economic investigations, the results of which are described in extensive reports. He points out manipulations, false statements, calculates real profits – in short, he brings to light everything that management would like to keep hidden. Delving into secrets is emphasized in the company's name: the Hindenburg is an airship that crashed in New Jersey, USA, in 1937. 36 people died in the crash (most of the passengers survived). The Hindenburg disaster put an end to the use of airships to transport passengers.

The causes of the disaster were kept secret for a long time, so there are many theories explaining how it happened. This is what prompted the founder of the American intelligence agency, Nathan Anderson, to choose an unusual “patron” for his company: the Hindenburg is a symbol of disasters for which humans are responsible.

Hindenburg Research vs. Adani Group

Hindenburg Research is not a company with a long tradition, it has only existed since 2017. However, its analysts have completed several very high-profile investigations that hit corporations with multi-million budgets. At the beginning of 2023, Hindenburg Research published a report in which it accused the Adani Group of many years of massive accounting fraud, using hundreds of shell companies in tax havens to siphon off money, falsifying commercial documentation and systematic manipulation of share prices of companies belonging to the group. Adani Gropu belongs to one of the richest men in the world, Gautam Adani.

We write more about Hindenburg Research in the text below.

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