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Superintendency Resolution Adjunct SMV No. 021-2024-SMV/11

Lima, 22 de marzo de 2024

Summary: The reconsideration appeal filed by Casa Grande Sociedad Anónima Abierta against Superintendency Resolution Adjunct SMV No. 010-2024-SMV/11 is declared unfounded, in the section referring to the out-of-time submission of the audited consolidated annual financial statements for the 2020 fiscal year

Administrado
:
Casa Grande Sociedad Anónima Abierta
Asunto
:
Administrative Sanctioning Procedure
Expediente N° :
2022047471

The Deputy Superintendent (e) of Supervision of Conductas de Mercados

VISTO:

Administrative file No. 2022047471, which contains, among others, the reconsideration appeal of 27 February 2024, filed by Casa Grande Sociedad Anónima Abierta (hereinafter, the Issuer) against the Resolution of the Deputy Superintendency SMV No. 010-2024-SMV/11 of 7 February 2024 (hereinafter, the Challenged Resolution), which resolved to sanction the Issuer with a total fine of 5.665 UIT equivalent to S/ 24,926.00 (Twenty-Four Thousand Nine Hundred Twenty-Six and 00/100 Soles), and Report No. 303-2024-SMV/11.2 (hereinafter, the Report), issued by the General Directorate of Conduct Compliance (hereinafter, the IGCC) of the Deputy Superintendency of Market Conduct Supervision (hereinafter, the SASCM);

CONSIDERANDO:

I. FUNCIÓN Y COMPETENCIA DE LA SASCM

1. That, administrative file No. 2022047471 contains the documentation and information relating to an administrative sanctioning procedure, which has been brought to the attention of the SASCM in observance of the exercise of the supervisory function and the sanctioning power of the Superintendency of the Stock Market – SMV, established by the Consolidated Text of its Organic Law, Legislative Decree No. 26126 (hereinafter, the SMV Organic Law), and the Single Ordered Text of the Securities Market Law, Legislative

Decree No. 861, approved by Supreme Decree No. 020-2023-EF1, as well as by the provisions of the Sanctions Regulations, approved by SMV Resolution No. 035-2018-SMV/01 (hereinafter, the Sanctions Regulations), and in articles 42 and 43 of the Regulations on the Organization and Functions of the Superintendency of the Stock Market, approved by Supreme Decree No. 216-2011-EF, in the sense that it is a specific function of the SASCM to resolve reconsideration appeals against the resolutions it issues;

II. HECHOS

2. That, through the Challenged Resolution, the following was resolved: (i) to sanction the Issuer with a fine of 1.545 UIT, equivalent to S/6,798.00 (Six Thousand Seven Hundred Ninety-Eight and 00/100 Soles), for having incompletely reported the material event of 6 December 2021 regarding the capitalization of receivables and the making of new contributions in its subsidiary Agrocasagrande S.A.C., and (ii) to sanction the Issuer with a fine of 4.12 UIT equivalent to S/ 18,128.00 (Eighteen Thousand One Hundred Twenty-Eight and 00/100 Soles), for having filed the audited consolidated annual financial statements for the 2020 financial year out of time;

3. That, by means of a document submitted on 27 February 2024, the Issuer filed a motion for reconsideration against the Challenged Resolution;

4. That, by means of Memorandum No. 864-2024-SMV/11 of 27 February 2024, the Office of the SASCM requested the IGCC to evaluate the motion for reconsideration filed by the Issuer;

5. That the arguments of the motion for reconsideration filed by the Issuer have been subject to evaluation in the Report by the IGCC, which has been submitted to the SASCM;

6. That the IGCC Report indicated the following:

“In accordance with the foregoing, the following is proposed:

1. To classify the appeal filed by Casa Grande as an appeal against Superintendencia Adjunta SMV Resolution No. 010-2024-SMV/11, in the part referring to the incomplete disclosure of the material event of 06 December 2021, and therefore it should be elevated to the Superintendent of the Securities Market.

2. To declare UNFOUNDED the motion for reconsideration filed by Casa Grande against Superintendencia Adjunta SMV Resolution No. 010-2024-SMV/11, in the part referring to the late submission of the audited consolidated annual financial statements for fiscal year 2020, for the considerations described in this Report.”

7. That, in observance of the provisions of article 18 of the Sanctions Regulation2, by means of Official Letter No. 1038-2024-SMV/11 of 14 of

[1] By means of Supreme Decree No. 020-2023-EF, published on 10 February 2023 in the Official Gazette El Peruano, the Single Ordered Text of the Securities Market Law, Legislative Decree No. 861, was approved.

[2] “Article 18.- Motion for reconsideration and appeal The sanctioned party may file a motion for reconsideration or an appeal against the decision of the respective Deputy Superintendency, except in cases processed in a single instance, where only a motion for reconsideration may be filed.

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March 2024 (hereinafter, Office No. 1038), the Report was sent to the Issuer, so that it may submit its arguments regarding it, within a period of five (5) business days, which were submitted and will be evaluated in this Resolution.

8. That, in Office No. 1038 it was also indicated that with respect to the appeal remedy linked to the infraction for incomplete presentation of the material fact of 6 December 2021 regarding the capitalization of debts and the making of new contributions in its subsidiary Agrocasagrande S.A.C., the administrative sanctioning procedure would be redirected ex officio in said respect and was elevated to the Superintendent of the Securities Market for the continuation of its processing as an appeal;

9. That, on 21 March 2024, the Issuer submitted arguments reiterating the arguments of the appeal and summarily adding the following:

(i) “(…) We agree with the criterion outlined by the General Intendant, Dr. Anderson Vela Guerrero, in the sense that, as it is an error in the invocation of the right, it corresponds to your office to treat it as an appeal (…)”.

(ii) “(…) Supreme Decrees were repeatedly promulgated at intervals, making it impossible to evaluate the duration periods and the scope of said event, as these evolved with new effects appearing, hindering diligent decision-making to prevent future effects, and thus it was not possible to foresee the contagion of our collaborator, consequently the breach of the obligation (…)”.

(iii) “(…) It must be considered that the Sanctions Regulation in its subsection 3.1 of numeral 3 of Annex I establishes the severity of infractions, this being a minor and inconsequential infraction, and may be subject to rectification, given that a significant harm to the legal interest to be protected has not yet materialized, therefore we are facing a disproportionate action by considering it as a ground for inadmissibility of the aforementioned exemption from liability (…)”.

III. ISSUES TO BE DETERMINED

10. That, it corresponds to determine whether or not it is appropriate to reconsider what was resolved in the Challenged Resolution in the respect referring to the late submission of the audited consolidated annual financial statements for the 2020 fiscal year;

IV. ANALYSIS

4.1. OF THE APPEAL REMEDY

11. That, in accordance with the provisions in recitals 2, 3 and 44 of the Challenged Resolution, it is specified that with respect to the infraction

[…] If a reconsideration remedy is filed, the Deputy Superintendent notifies the administered party of the report of the General Intendancy of Compliance containing the opinion on the filed remedy, so that it may formulate its arguments within a period of no less than five (5) days, counted from the day following the aforementioned notification. (…)” (Underlining and emphasis added).

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sanctioned for the incomplete presentation of the material fact of 6 December 2021, the provisions of numeral 3) of article 86 of the Single Ordered Text of Law No. 27444, Law of General Administrative Procedure, approved by Supreme Decree No. 004-2019-JUS (hereinafter, TUO of the LPAG), are applicable, which establishes that it is the duty of the authorities with respect to the administrative procedure and its participants, among others, to “Redirect ex officio the procedure, when it notices any error or omission of the administered parties, without prejudice to the action that corresponds to them.” Likewise, article 223 of the TUO of the LPAG establishes: “The error in the qualification of the remedy by the appellant will not be an obstacle to its processing as long as the true nature is deduced from the writing”;

12. That, in that sense, considering that the charge referring to the incomplete presentation of the material fact of 6 December 2021 must be processed in two (2) administrative instances, the present administrative sanctioning procedure has been redirected and the reconsideration remedy submitted by the Issuer in the respect referring to the incomplete presentation of the material fact of 6 December 2021 has been processed as an appeal, to the extent that from the submitted remedy it is noted that the purpose is to question the grounds contained in the Challenged Resolution and the Issuer has not submitted new evidence, which has been notified to the Issuer through Office No. 1038;

13. That, on the other hand, in accordance with the provisions of article 2183 of the TUO of the LPAG, the reconsideration remedy must be submitted within the period of fifteen (15) peremptory days from notification of the challenged administrative act, and must comply with the requirements provided in articles 1244, 2195, 2216 of the same Law;

[3] «Article 218.- Administrative remedies 218.2 The term for the filing of remedies is fifteen (15) peremptory days and they must be resolved within thirty (30) days».

[4] «Article 124.- Requirements of writings Every writing submitted before any entity must contain the following: 1. Full names and surnames, domicile and number of National Identity Document or foreigner's card of the administered party, and where applicable, the capacity of representative and of the person represented. 2. The concrete expression of what is requested, the factual grounds supporting it and, when possible, the legal grounds. 3. Place, date, signature or digital fingerprint, in case of not knowing how to sign or being impeded. 4. The indication of the body, entity or authority to which it is addressed, understanding as such, as far as possible, the authority of the grade closest to the user, according to the hierarchy, with competence to hear and resolve it. 5. The address of the place where notifications of the procedure are to be received, when it is different from the real domicile stated pursuant to numeral 1. This designation of domicile takes effect from its indication and is presumed to subsist, as long as its change is not expressly communicated. 6. The list of the documents and annexes accompanying it, indicated in the TUPA. 7. The identification of the file of the matter, in the case of procedures already initiated."

[5] "Article 219.- Reconsideration appeal The reconsideration appeal shall be filed before the same body that issued the first act that is the subject of the challenge and must be supported by new evidence. In the cases of administrative acts issued by bodies that constitute a single instance, new evidence is not required. This appeal is optional and its non-filing does not prevent the exercise of the appeal".

[6] "Article 221.- Requirements of the appeal The written appeal must state the act being appealed and must comply with the other requirements provided in article 124".

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14. That, in the present case, it is observed that the Challenged Resolution was notified to the Issuer on 7 February 2024 and the reconsideration appeal was filed on 27 February 2024, that is, within the established legal term;

15. That, it must be indicated that the other requirements for the filing of the reconsideration appeal, established by article 221 in conjunction with article 124 of the TUO of the LPAG, have been verified and complied with; therefore, the evaluation of this reconsideration appeal proceeds in the extreme referred to the infringement for the late submission of the audited consolidated annual financial statements for fiscal year 2020;

4.2. EVALUATION OF THE RECONSIDERATION APPEAL

16. That, next, we proceed to analyze and evaluate each of the arguments contained in the challenge appeal filed by the Issuer, in the extreme referred to the late submission of the audited consolidated annual financial statements for fiscal year 2020;

1. ON THE NATIONAL STATE OF EMERGENCY DUE TO COVID-19 AS A CASE OF FORCE MAJEURE

In this part of its appeal, the Issuer states the following:

"At the time of issuing the Resolution that is the subject of this appeal, it has not been taken into account that we have accredited that my represented party has no record, much less the status of repeat offender, regarding sanctions for omission of timely submission. This procedure is the first in our record and responds to an involuntary delay in the submission of the derived information; WE REPEAT, of the COVID-19 pandemic that caused massive absenteeism of our personnel (...)".

"It seems that the absence of intent is not understood and that, rather, we are in a case of fortuitous event and force majeure, defined in the 'pandemic regulations' themselves that suspended and extended terms in all areas including specifically the ADMINISTRATIVE one. In the newspaper El Peruano, in its article entitled 'Administrative precedent on fortuitous event and force majeure as a ground exempting liability for administrative infractions' it provides scope on the aforementioned assumptions so that they constitute conditions that break the causal link and exempt the offender from liability (...)".

"As reported in our defenses, the non-timely submission is due to the fact that our collaborator, in charge of preparing the financial statements, became infected during the mandatory quarantine, was on medical rest, making it impossible to comply with the obligation to submit said information within the expected term (...)".

"We are facing an indolent position where a requirement that even the Entity itself concludes does not generate a risk to the protected legal interest of investors or the market because it does not reflect significant movements or transactions that could alter the stock market system is placed before health and life."

"Both in the Resolution that is challenged with our reconsideration and the report, which we now challenge, a statement of the 'COVID' regulations is made and, despite its express knowledge, it is intended to regulate what should be understood as fortuitous event or force majeure, in order to conclude that the

non-submission of the information merits a confiscatory sanction of 4.12 UIT because, in your loyal understanding, it does not constitute cases of force majeure." "That is, the illness and absence of personnel and the restrictions on movement and the impossibility of freely accessing accounting and financial information are not sufficient arguments to refute the assertion of 'prudent time' referred to by the Intendencia."

EVALUATION

Prior to the corresponding analysis, it is important to state that this Deputy Superintendency does not share the expressions contained in this part of the reconsideration appeal, when it is stated that "We are facing an indolent position where a requirement that even the Entity itself concludes does not generate a risk to the protected legal interest of investors or the market is placed before health and life (...)" (Highlight added) and "(...) in order to conclude that the non-submission of the information merits a confiscatory sanction of 4.12 UIT because, in your loyal understanding, it does not constitute cases of force majeure." (Highlight added).

In this regard, it is important to note that this administrative sanctioning procedure has been conducted in accordance with the principles of administrative sanctioning power referred to in article 248 of the TUO of the LPAG, and therefore we consider that the use of these expressions "indolent position" and "confiscatory sanction" affect the principle of procedural good faith, with which all parties must conduct themselves in the framework of administrative procedures, in accordance with subsection 1.8 of numeral 1 of article IV of the Preliminary Title of the LPAG7 .

The Issuer again maintains that the delay in submitting the Audited Annual Consolidated Financial Statements as of 31 December 2020 originated from the COVID-19 pandemic.

In this regard, in the present case, it is noted that at the time of the commission of the infringement (1 May 2021), the National State of Emergency declared by Supreme Decree No. 184-2020-PCM had been extended on five (5) occasions, by Supreme Decrees Nos. 201-2020-PCM, 008-2021- PCM, 036-2021-PCM, 058-2021-PCM and 076-2021-PCM8 . Likewise, it is noted that the commission of the infringement (1 May 2021) occurred during the fourteenth month of the National State of Emergency.

In that sense, it is considered that at the time of the commission of the infringement (1 May 2021), the National State of Emergency was occurring repeatedly over time, that is, said event had a permanent character.

[7] "Article IV. Principles of the administrative procedure 1. The administrative procedure is fundamentally based on the following principles, without prejudice to the validity of other general principles of Administrative Law: (…) 1.8. Principle of procedural good faith.- The administrative authority, the administered, their representatives or attorneys and, in general, all participants in the procedure, carry out their respective procedural acts guided by mutual respect, collaboration and good faith. The administrative authority cannot act against its own acts, except in the cases of ex officio review contemplated in this Law. (…)".

[8] Supreme Decree No. 076-2021-PCM, in force as of 19 April 2021, extended the National State of Emergency for a period of thirty-one (31) calendar days, as of Saturday 1 May 2021.

On this matter, it must be taken into account that a case of force majeure must be transitory or temporary and does not have a permanent character, because that would conflict with the requirements of extraordinary, unforeseeable and irresistible.

The Permanent Constitutional and Social Law Chamber of the Supreme Court of Justice of the Republic in Cassation No. 1764-2015 of 15 September 2015 has ruled on the matter in the following terms (p. 9 and 10):

"THIRD: Interpretation of article 1315 of the Civil Code (…) 3.6 In such context, for the qualification of the interruption of electric power supply due to force majeure that electric power concessionaire companies are obliged to communicate to users and the Supervisory Entity by virtue of article 87 of the Electric Concessions Law, consideration must be given to the unforeseeable, irresistible and extraordinary nature of the event (specified in the preceding rule N1), related to the frequency of the occurrence of the event (described in rule N2), in such a way that if the event that interrupts or varies the conditions of the electric supply becomes frequent, being repetitive, usual and common, it undermines the unforeseeability of the fact, insofar as the frequency and reiteration of the facts contributes to the possibility of foreseeing and the extraordinary character resides in the event being outside the ordinary and common; therefore the frequency will imply as a legal consequence that the event is not qualified by the competent Organism as one of force majeure, because the habitual and ordinary character of the event ceases to be unforeseeable and extraordinary; due to its reiteration, it can be foreseen, resulting foreseeable and ordinary, and the concessionaire must take adequate measures to avoid the event." (Highlight added).

According to Cassation No. 1764-2015, if an event becomes frequent, that is, repetitive, usual and common, the extraordinary and unforeseeable characters of the fact are undermined. Likewise, the frequency and reiteration of a fact allows it to be foreseen, resulting foreseeable and ordinary, and adequate measures must be taken to avoid it.

On the other hand, Superintendent Resolution No. 058-2011-EF/94.01.2 of 30 November 2011 has stated the following within the framework of the obligation to submit periodic or occasional information (p. 4):

"That, although GYRASA alleges being in the same circumstances that led the Administrative Tribunal to sanction it with a warning by Resolution No. 041-2009-EF/94.01.3 dated 30 January 2009, it must be taken into account that exceptional situations by their very nature do not persist for a prolonged time, because if they did, they would leave their exceptional character to become a permanent situation;

That, this is so insofar as exceptionality is characterized by the occurrence of an unexpected situation that, in this case, would prevent compliance with the obligations to submit information in a timely manner. However, in the present case, the circumstances that GYRASA was going through were known in advance and the fact that they have been prolonged necessarily means that the company could have adopted preventive measures to comply with its obligation to submit information;

That, indeed, the extraordinary nature refers mainly to the fact that the circumstance that prevents compliance with an obligation is unexpected

and unforeseeable, which does not apply in the case of GYRASA, since the situation it is going through is not strange to it, but, on the contrary, has been known for a considerable time; That, therefore, to the extent that GYRASA was in a position to adopt the appropriate measures to avoid non-compliance with its obligations, its situation cannot be qualified as unforeseeable and, in that sense, the fine imposed by the sanctioning body cannot be left without effect in application of the “Exceptional Situations” regulated in the Sanction Criteria; (…)” (Highlight added).

As indicated, exceptional situations by their very nature do not persist for a prolonged time; if they did, they would lose their exceptional character and become a permanent situation. Likewise, the fact that the circumstance that prevents compliance with the obligation to submit information is prolonged over time necessarily means that an issuer can adopt preventive measures to comply with said obligation.

As previously indicated, it is considered that at the time of the commission of the infringement (1 May 2021), the National State of Emergency occurred repeatedly over time, that is, said event was permanent in nature, and therefore did not meet the requirements of being extraordinary, unforeseeable and irresistible; in that sense, it was a common and foreseeable event and it was possible to prevent said event from impeding compliance with the Issuer's obligation.

According to the foregoing, considering that the National State of Emergency was an event that was permanent or frequent at the time of the commission of the infringement (1 May 2021), in the present case a case of force majeure has not been established, and therefore the Issuer is not exempt from liability for the infringement. In accordance with the provisions of Superintendency Resolution No. 058-2011-EF/94.01.2, the fact that the National State of Emergency has been prolonged necessarily means that the Issuer could adopt preventive measures to comply with its obligation to timely submit the consolidated financial information for fiscal year 2020.

In this regard, account should be taken of the provisions of recital 22 of the Challenged Resolution (p. 14):

“(…) although the National State of Emergency was in force at the time of the commission of the infringement (1 May 2021), within the framework of diligent action, it is considered that the Issuer, in its capacity as securities issuer, had a prudent time in which it should have adapted its internal procedures in order to guarantee compliance with the information submission obligations during fiscal year 2021”.

With regard to the publication entitled “Superintendencia Nacional de Salud – Precedente administrativo sobre el caso fortuito y la fuerza mayor como causal eximente de responsabilidad por infracciones administrativas”, published in the Official Gazette El Peruano on 17 January 2021, to which the Issuer refers in its appeal, it is appropriate to note that the aforementioned administrative precedent is of mandatory observance by the Superintendencia Nacional de Salud (SUSALUD). The document itself states that its purpose is “to establish a criterion for the interpretation of SUSALUD's competence rules that defines and standardizes the scope and meaning of fortuitous event and force majeure, applicable to the Institution's administrative sanctioning procedures (…)”.

Notwithstanding the foregoing, this Deputy Superintendency shares the provisions of numeral 4 of AGREEMENT No. 009-2020 of the aforementioned administrative precedent, which states the following:

“The determination of Fortuitous Event or Force Majeure, consequently, shall be made by addressing the characteristics of the specific circumstances and facts under analysis.”

In accordance with the foregoing, in view of the specific circumstances and facts, in the present case a case of force majeure has not been established, due to the following:

Given the declaration of the National State of Emergency due to COVID-19, and in order not to further affect the development of the economic activities of securities issuers, such as the Issuer, through Superintendency Resolutions Nos. 033 and 046-2020-SMV/02 of 21 March and 27 May 2020, the SMV established new deadlines for the submission of financial information and annual report for fiscal year 2019, interim information as of 31 March 2020, interim information as of 30 June 2020 and information on economic group, as well as for the appointment of auditors for fiscal year 2020.
The SMV did not consider it necessary to establish new deadlines for the submission of subsequent financial information, such as the consolidated financial information for fiscal year 2020.
Issuers of securities, such as the Issuer, had a reasonable time to prepare or adapt their internal procedures in order to guarantee compliance with the information submission obligations during fiscal year 2021.
At the time of the commission of the infraction (1 May 2021), the National State of Emergency declared by Supreme Decree No. 184-2020-PCM had been extended five (5) times. Likewise, the commission of the infraction (1 May 2021) occurred during the fourteenth month of the National State of Emergency.
The National State of Emergency was an event that had a permanent or frequent character at the time of the commission of the infraction (1 May 2021).
The fact that the National State of Emergency was prolonged necessarily means that the Issuer was able to adopt preventive measures to comply with its obligation to timely submit the consolidated financial information for fiscal year 2020.

With regard to the arguments presented on this point, it is appropriate to reaffirm what was indicated in the preceding paragraphs, in the sense that the argument by which the Issuer seeks to exempt itself from liability for its non-compliance under the excuse that its collaborator contracted Covid-19 should not be upheld, since the Issuer should have foreseen and taken the necessary measures to prevent situations such as the one described from occurring in a context that did not qualify as extraordinary.

For the foregoing reasons, it is considered that the reconsideration appeal must be declared unfounded on this point.

2. ON THE VOLUNTARY REMEDIATION OF THE INFRACTION

On this point of its appeal, the Issuer again maintains that the exemption from liability for voluntary remediation, set forth in literal f) of numeral 1 of article 257 of the TUO of the LPAG, is applicable to this administrative sanctioning procedure, stating the following:

"(...) it has not been considered that the Audited Annual Consolidated Financial Statements as of 31.12.2020 were submitted on 10.05.2021 voluntarily and prior to any imputation of charges or the initiation of the administrative sanctioning procedure, therefore we find ourselves; WE REITERATE, in a ground for exemption from liability for voluntary remediation provided for in literal f) of numeral 1 of article 257 of the TUO of the Law of General Administrative Procedure."

In this regard, the Issuer states the following:

"(...) the terms of Cassation No. 8716-2022 LIMA are applicable, it is indicated that since the plaintiff remedied the infraction incurred 'voluntarily and prior to the inspection action and the imputation of charges, by virtue of the provisions of numeral 1 of article 255 of the aforementioned single text, which establishes the conditions exempting from liability for infractions, indicating in literal f) as an exempting ground the voluntary remediation by the possible sanctioned party of the act or omission imputed as constituting an administrative infraction, prior to the notification of the imputation of charges referred to in subsection 3) of article 253, the plaintiff should be exempted from the fine imposed', thus, if the offender voluntarily remedies before the imputation of charges, restoring legality, the imposition of a corrective measure by the administration is unnecessary, since the sanction is an instrument to enforce compliance with the rules since it would have been previously corrected through compliance with the obligation."

Likewise, it states the following:

"(...) in the challenged Resolution it is stated that because the cited LAW 'does not contemplate the case of any infraction that is not subject to remediation', article 28 of the Sanctions Regulation has provided that certain conducts in the securities market are not subject to voluntary remediation, among which is the late submission of financial information, adding that said 'Sanctions Regulation is a rule in force and mandatory both for the Issuer and for this Deputy Superintendency'. That is, the Administration is acknowledging that the exception provided for in article 28 of the Sanctions Regulation EXCEEDS THE SCOPE PROVIDED FOR IN ARTICLE 257 OF THE TUO OF THE LAW OF GENERAL ADMINISTRATIVE PROCEDURE, incorporating a case not provided for in the referred Law, distorting it; since let us remember that the LAW has only provided as a condition to apply voluntary remediation, that it be carried out before the inspection action and the imputation of charges, that is, before the initiation of the administrative sanctioning procedure. The application of criteria of diffuse administrative control is not being requested, but rather due attention to the regulatory hierarchy."

"This supports our argument that the regulation implemented by the SMV departs from the provisions of literal f) of numeral 1 of article 257 of the TUO of the Law of General Administrative Procedure, as well as violates the provisions of subsection 2, article II of the cited normative body, since it regulates

conditions less favorable to the administered parties in the regime of special procedures, distorting the provisions of the LPAG."

EVALUATION

The Issuer again maintains in its written objection and in its written statements that the exemption from liability for voluntary rectification, set out in letter f) of item 1 of Article 257 of the TUO of the LPAG9, is applicable in this administrative sanctioning proceeding.

In this regard, it should be noted that the Challenged Resolution was clear in stating the following in its recital 19 (p. 9):

“In that sense, pursuant to the aforementioned regulations, the Issuer is not entitled to an exemption from liability, because according to letter c) of Article 28 of the Sanctions Regulations, voluntary rectification does not apply as an exemption from liability in cases of incomplete submission of material facts or in cases of late submission of financial information, among others.”

In that sense, by virtue of the Principle of Legality contained in item 1.1, paragraph 1, of Article IV of the TUO of the LPAG, and the Principle of Singular Non-Derogability of Regulations10, Article 28 of the Sanctions Regulations, pursuant to which infringements related to the late submission of financial information are deemed non-rectifiable, is binding on regulated entities and on this Deputy Superintendency.

By way of illustration, the legal grounds of the Report justifying the regulatory precision of the infringements deemed non-rectifiable in the securities market are cited:

With respect to this argument, in principle it must be remembered and established that the SMV is a specialized technical body attached to the Ministry of Economy and Finance whose purpose is to safeguard the protection of investors, the efficiency and transparency of the markets under its supervision, and it must be emphasized that for this purpose, it has legal powers to issue the legal regulations that govern matters of the securities market, commodities market and collective fund system, as well as to supervise compliance with the aforementioned legislation by the natural and legal persons participating in said markets. In accordance with this, the SMV approves the securities market regulations and classifies the infringing conduct of those who participate in the securities market. For these purposes, see letters a) and b) of article 1 and letters b) and d) of article 5 of the SMV Organic Law.

Well, having expressed the above, it is appropriate to determine whether the SMV could or could not make distinctions from the point of view of administrative infractions in the securities market, based on the provisions of letter f) of numeral 1) of article 257 of the TUO of the LPAG referring to the exemption from liability

[9] "Article 257.- Exemptions and mitigating factors of liability for infractions 1.- The following constitute conditions exempting liability for infractions: (…) f) The voluntary correction by the possible sanctioned party of the act or omission imputed as constituting an administrative infraction, prior to the notification of the imputation of charges referred to in paragraph 3) of article 255."

[10] Morón, J (2003). The defect of singular repeal of regulatory norms. In Ius Et Veritas, No. 26, Page 86 et seq.

by voluntary correction, also known in doctrine as an absolute excuse.

Although it is not intended to develop from a doctrinal perspective regarding this absolute excuse, it is necessary to point out that the SMV has within its powers the ability to determine which infractions in the securities market could be subject to correction and which conducts should not be within this exemption. For this, obviously, it has taken into consideration the essential element of this exemption from liability, which is the correction, understanding that we are dealing with a typical, unlawful and culpable act.

A second aspect to consider is that the LPAG does not expressly state that every administrative infraction can be subject to an absolute excuse, since if that were the case, the LPAG would become a distorting norm, which would seriously affect compliance with sectoral norms, through which the State is organized and functions.

A third aspect to consider is that the LPAG is a transversal norm to general administrative procedures and that according to the provisions of article 248 of the TUO of the LPAG, the administrative sanctioning power is indisputably governed by eleven (11) principles that every public entity must observe: legality, due procedure, reasonableness, typicity, non-retroactivity, concurrence of infractions, continuation of infractions, causality, presumption of lawfulness, culpability and non bis in idem. v.g. the structure of the SMV Sanctions Regulation fully complies with these principles.

In this sense, considering that there are certain infractions whose consequences cannot be repaired, the Sanctions Regulation has established, based on criteria of protection of the legal interest protected by the Securities Market Law, non-compliances that are not subject to correction, which does not imply that this regulation supposes less favorable conditions for the administered, even more so when the Sanctions Regulation fully observes those principles of administrative sanctioning power referred to in article 248 of the TUO of the LPAG.

In that regard, and in accordance with the provisions of numeral 247.2 of article 247 of the TUO of the LPAG11, the inclusion of these exceptions does not violate any of the principles of the administrative sanctioning power referred to in article 248 of the TUO of the LPAG, nor does it undermine the structure and guarantees provided for the administrative sanctioning procedure. Likewise, it must be reiterated that the inclusion of these exceptions in no way entails imposing less favorable conditions on the administered parties.

Having said the foregoing, there is no legal impediment for the SMV, within its policy of applying the rules that regulate the activity of the securities market, like other State entities, to make distinctions in which

[11] “Article 247.- Scope of application of this chapter (…) 247.2. The provisions contained in this Chapter apply on a supplementary basis to all procedures established in special laws, including tax procedures, which must necessarily observe the principles of the administrative sanctioning power referred to in article 248, as well as the structure and guarantees provided for the administrative sanctioning procedure. Special procedures may not impose less favorable conditions on the administered parties than those provided for in this Chapter. (…)”

cases of infringing conduct, voluntary rectification does not apply as an exemption from liability. Read the provisions of the second paragraph of article 28 of the Sanctions Regulation: “The following are not eligible for rectification for the purposes of the provisions of literal f) of article 27: a) The presentation of inaccurate or false information or documentation to the SMV and/or that is disclosed to the market; b) The contravention of market abuse rules, referring to the improper use of privileged information and market manipulation; c) The late or incomplete presentation, or the non-presentation of material events, financial information and annual reports; d) The performance of activities not permitted or the provision of services or performance of activities not authorized by the SMV, in cases where the regulations require having the respective authorization; e) The performance of activities that involve the disposal of funds, financial instruments or any asset owned by clients without their authorization or the breach of the custody, administration or fiduciary duties held by entities authorized by the SMV.” (Highlight added)

This attribution, which has been supported through sanction resolutions, has the purpose of not generating impunity and preventing the defendant in the administrative action from failing to comply with the deadlines for submitting information. If Casa Grande's argument were accepted, a perverse incentive would be created not to comply with the rules on information transparency, turning these obligations into harmless or anodyne regulations and, therefore, these breaches would become a permanent violation of the protected legal interest, which is the transparency of the securities market, which is the backbone of any securities market. Thus, the maintenance and operation of a transparent market would be seriously affected.

Well then, further to the above, it must be taken into account that the constituent elements of the infraction of late presentation of audited consolidated financial information refer to a presentation of information outside the period established in the regulations on the matter, specifically article 8 of the Rules on Preparation and Presentation of Financial Statements and Annual Report by Entities Supervised by the Superintendency of the Securities Market, approved by SMV Resolution No. 016-2015-SMV/0112, in force at the time the facts occurred13. This conduct is typically a breach of a certain period established in the rule; therefore, when the breach occurs, rectification of the infraction is not possible, since the failure to present in a timely manner cannot be rectified with a late presentation. The infraction is non-rectifiable, based on the simple factual verification that the information was not provided within the

[12] “Article 8.- Deadline for presentation of annual consolidated financial statements of the parent company The parent company of issuing companies with securities registered in the RPMV, of legal entities registered in the RPMV, and of collective fund management companies is obliged to present to the SMV its annual audited consolidated financial statements when said parent company or its securities are registered in the RPMV; and, if applicable, to the entities responsible for the conduct of centralized negotiation mechanisms, on the day it has been approved by the corresponding corporate body, the deadline for said approval being 30 April of each year, except for the parent companies of collective fund management companies, in which case the deadline is 15 May of each year.”

[13] By SMV Resolution No. 013-2023-SMV/01, published in the Official Gazette El Peruano on 10 December 2023, the Rules on Preparation, Presentation and Dissemination of Financial Statements, Annual Report and Management Report applicable to entities supervised by the Superintendency of the Securities Market were approved. SMV Resolution No. 013-2023-SMV/01entered into force on 11 December 2023.

established deadline. That is, if the negative effects of the conduct cannot be reversed, by definition, there can be no remediation of the conduct.

Regarding the requirements demanded for the application of voluntary remediation as a ground for exemption from liability, it is important to mention the Practical Guide on the administrative sanctioning procedure, prepared by the General Directorate of Legal Development and Organization of the Ministry of Justice and Human Rights (MINJUS), which states regarding voluntary remediation as a ground for exemption from liability, the following14:

"2.4. Exemptions and mitigating circumstances of administrative liability When exercising its sanctioning power, the administrative authority must assess a series of circumstances linked to the specific case that will allow it to determine whether a case of exclusion of liability has been configured (exempting conditions) (...) in the cases where applicable.

(...)

The case provided for in literal f) has a different nature from the previous ones, since it provides for typical and unlawful conduct, with intent or negligence, in which the administered party decides to remedy its infraction before the administrative authority decides to exercise its sanctioning power. It is a case based on a punitive policy decision to protect the legal interest, preferring the spontaneous reparative action of the responsible administered party over conducting preliminary proceedings and initiating the sanctioning procedure with all the costs that this involves.

It should be noted that this case consists not only of the cessation of the infringing conduct, but also, where applicable, the remediation implies the reparation of the consequences or harmful effects to the protected legal interest derived from the infringing conduct. This with the purpose of not generating impunity and preventing the accused from appropriating the benefit unlawfully obtained from the infraction." (Highlight added)

From the text it is inferred that for the application of voluntary remediation as a ground for exemption from liability, the administrative authority must not only evaluate the timeliness and voluntariness of the remediation, aspects to which Casa Grande refers, but as has been indicated, whether the infringing conduct is remediable, an aspect to which Casa Grande does not refer.

On this matter, Hebert Tassano Velaochaga states: "Under this perspective, not only the concurrence of the described requirements (before the initiation of the PAS) will be evaluated, but also the remediable nature of the detected non-compliance, from the nature of the infringing conduct and from the effects it deploys, taking into account that there are infractions that, due to their own nature or by express legal provision, are not susceptible to being remedied." 15 (Highlight added)

[14] MINJUS. Practical Guide on the administrative sanctioning procedure. 2nd edition, approved by Directoral Resolution No. 002-2017-JUS/DGDOJ of 07 June 2017, p. 45 and 47.

[15] TASSANO VELAOCHAGA, Herbert. The voluntary remediation of infractions as a ground for exemption from liability. The case of the SUSALUD Tribunal. Dimensión Mercantil, 04 June 2022. Link: https://dimensionmercantil.pe/la-subsanacion-voluntaria-de-infracciones-como-eximente-de-responsabilidad-el-caso-del-tribunal-de-sanciones-de-susalud/

As can be seen, this author not only highlights the importance of evaluating the remediable nature of the infringing conduct for the application of voluntary remediation as a ground for exemption from liability, but also recognizes that due to the very nature of the infraction or express legal provision there may be cases in which remediation does not apply.

In that sense, taking into account what has been indicated, the infraction subject of this administrative sanctioning procedure is not capable of being remedied, since it is not possible to repair the consequences or effects of the non-compliance in the late submission of financial information, given the nature of the infringing conduct. As previously indicated, this conduct is typically a non-compliance with a certain deadline established in the norm, so the lack of timely submission of financial information could not be remedied with a late submission.

Without prejudice to the aforementioned, it is appropriate to indicate that according to the Criteria applicable to the administrative sanctioning procedure for non-compliance with the norms that regulate the submission of periodic or eventual information, approved by SMV Resolution No. 006-2012-SMV/01, in force at the time the facts occurred16, the lack of timely submission of periodic information (financial information) constitutes an administrative infraction of an instantaneous nature17, and that precisely the non-remediable character is typical of this class of infractions, as Natalia Zuñiga Arbildo states:

"Thus, cases may arise in which the impossibility of reversing the effects of an infraction is impossible. Basically, this would happen with those infractions of instantaneous effects, in which "the injury or endangerment of the protected legal interest occurs at a determined moment, in which the infraction is consummated, without producing a lasting unlawful situation." (BACA ONETO, Víctor Sebastián. The statute of limitations of infractions and their classification in the General Administrative Procedure Law. Derecho & Sociedad Magazine No. 37, Lima, 2012, p. 268)."18 (Highlight added)

[16] Through SMV Resolution No. 007-2023-SMV/01, published in the Official Gazette El Peruano on 08 September 2023, the Gradualness Regime of Sanctions for late submission of financial information, annual report and material events was approved, and the Criteria applicable to the administrative sanctioning procedure for non-compliance with the rules governing the submission of periodic or occasional information, approved by SMV Resolution No. 006-2012-SMV/01, were repealed. SMV Resolution No. 007-2023-SMV/01 entered into force on 01 January 2024.

[17] “4.1. CRITERIA (…) Fourth Criterion: Repetition and/or continuity in the commission of the infraction (…) The criterion of continuity in the commission of the infraction is not applicable to this type of infraction since the failure to timely submit periodic or occasional information constitutes an administrative infraction of an instantaneous nature. (…)”

[18] ZUÑIGA ARBILDO, Natalia. Apologizing is not enough: OEFA's interpretation regarding the ground for exemption from liability due to voluntary rectification. Link: https://agnitio.pe/articulo/no-basta-con-pedir-perdon-la-interpretacion-de-oefa-respecto-a-la-causal-de-eximente-de-responsabilidad-por-subsanacion-voluntaria/

In that sense, it may be argued that there is no rectification, since there is no spontaneous cessation of the conduct constituting the non-compliance, because its submission outside the established deadline will always be late.

With regard to Cassation No. 8716-2022-LIMA issued by the Fifth Transitory Constitutional and Social Law Chamber of the Supreme Contentious Administrative Court, to which Casa Grande refers to support that the SMV must recognize voluntary rectification in the infractions subject matter of this administrative sanctioning procedure, and which was previously submitted as part of its arguments before the SASCM, it is reiterated that the Sanctions Regulation, by having determined which infracting conducts are not capable of being rectified, does not contravene any of the principles of the administrative sanctioning power.

Likewise, on this matter, account must be taken of what is stated in recital 22 of the Challenged Resolution (pp. 15 and 16):

“From the review, the following grounds are extracted which are considered relevant and were not cited by the Issuer:

The Fifth Transitory Constitutional and Social Law Chamber states the following:

'Likewise, it is appropriate to harmonize the provisions of article 145 with article 199 of the Regulation of the General Customs Law, approved by Supreme Decree No. 010-2009-EF, amended by Supreme Decree No. 245-2013-EF, which establishes the following: In accordance with the provisions of the second paragraph of article 145 of the Law, the owner or consignee may request the rectification of the customs declaration within the three (03) months elapsed from the date of the granting of the release in the event that merchandise is found in greater quantity or different from that consigned in the merchandise declaration. The Customs Authority shall accept the rectification of the declaration upon prior presentation of the supporting documentation and payment of the corresponding customs tax debt and surcharges. The rules under comment establish the conditions to be exempt from the fine sanction, which are: i) that the merchandise found was greater or different from that consigned in the customs declaration; ii) that the merchandise found be declared, the customs tax debt and corresponding surcharges be paid, and iii) that the rectification of the customs merchandise declaration be requested within the three (03) months elapsed from the date of the granting of the release. Note that the rule of the cited article 199 states that: 'The Customs Authority shall accept the rectification of the declaration, upon prior presentation of the supporting documentation and payment of the corresponding customs tax debt and surcharges', which emphasizes the voluntary aspect of the rectification of the infraction imputed by the offender, all of which supposes that, if the conditions listed above occur, such offender will be exempt from the sanction. It is appropriate to harmonize the provisions of the second paragraph of article 145 of the General Customs Law with article 255 of the Single Ordered Text of the General Administrative Procedure Law, approved by Supreme Decree No. 006-2017-JUS, a rule published on twenty March two thousand seventeen. In the same line, numeral 1 of article 255 of the aforementioned single text establishes the conditions exempting from liability for infractions, stating in literal f) as a ground Electronic document digitally signed within the framework of Law No. 27269, Law on Signatures and Digital Certificates, its Regulation and amendments. The integrity of the document and the authorship of the signature(s) can be verified at https://apps.firmaperu.gob.pe/web/validador.xhtml

exempting ground 'the voluntary rectification by the possible sanctioned party of the act or omission imputed as constituting an administrative infraction, prior to the notification of the imputation of charges referred to in subsection 3) of article 253'.'

According to the judgment, and without entering into a broader analysis of the referred cassation, it is considered that the rules governing customs activities, in the specific case described by the judgment, allow voluntary rectification by establishing conditions to be exempt from fine sanctions, a case different from the regulation of the securities market, as previously indicated. Therefore, the fact of mentioning in a biased manner a citation of the cassation only corroborates that the arguments presented by the Issuer lack legal basis".

Regarding Casa Grande's argument that the regulation implemented by the SMV violates the provisions of numeral 2 of article II of the Preliminary Title of the TUO of the LPAG19, given that it "regulates conditions less favorable to the administered in the regime of special procedures", it is appropriate to reiterate that the fact that the SMV has determined or differentiated in which infractions voluntary rectification does not apply does not violate or transgress the provisions of the aforementioned norm. The reasoning is simple, since this determination, which responds to a sectoral policy, does not impose less favorable conditions on the administered, to the extent that, as has been stated, it complies with the standard of a norm that safeguards the principles of administrative sanctioning power and, by way of addition, with the general principles of administrative law; therefore, the SMV, when regulating its special procedures, complies with observing the administrative principles, as well as the rights and duties of the subjects of the procedure, established in the LPAG.

It should be noted that various administrative entities, such as the Supervisory Agency for Investment in Energy and Mining (OSINERGMIN)20, the Supervisory Agency for Private Investment in Telecommunications (OSIPTEL)21, the National Superintendence of Labor Inspection (SUNAFIL)22, among others, have specially regulated, according to the nature of each sector and of the infraction, the non-application of the exemption from liability for voluntary rectification in specific unlawful conducts, so it is not only the SMV that has determined this difference".

Furthermore, what the SMV has determined regarding which infractions are or are not rectifiable is also in accordance with the provisions of numeral 8 of article 86 of the TUO of LPAG, which provides that it is the duty of authorities to interpret administrative norms in the manner that best serves the public purpose to which they are directed, reasonably preserving the rights of the administered.

[19] "Article II.- Content (…) 2. Laws that create and regulate special procedures may not impose conditions less favorable to the administered than those provided in this Law. (…)"

[20] https://www.gob.pe/institucion/osinergmin/normas-legales

[21] https://www.gob.pe/institucion/osiptel/normas-legales?filter%5Bterms%5D=sanci%C3%B3n&filter%5Btype%5D=&sheet=

[22] https://www.gob.pe/institucion/sunafil/normas-legales/1996815-190-2021

In the present case, the public purpose involved is the protection of investors, the efficiency and transparency of the securities market, the correct formation of prices and the dissemination of all information necessary for such purposes, in accordance with the first paragraph of article 1 of the Organic Law of the SMV23. Accordingly, it is not possible to ensure compliance with this purpose by assuming that every non-compliance in the securities market should be rectifiable, without considering exceptions, taking into account that there are certain cases in which it is not possible to rectify the infraction, by its very nature.

On the other hand, it is important to note that it is reasonable that the special norms of administrative entities are those that establish the exceptions in which voluntary rectification does not apply as an exemption from liability, given the diversity of administrative infractions that the various administrative entities may impose.

In this regard, Natalia Zuñiga Arbildo24 states the following:

"It is clear that although the law does not make distinctions (ie. it would be impossible for the law to cover all cases of potential infractions), practice does limit the possibility of rectifying, and there are situations in which it does not proceed. Thus, cases may arise in which the impossibility of reversing the effects of an infraction is impossible (…)" (Underline and highlight added)

"(…) it seems that it is up to each entity to carry out an analysis of each infraction, in order to verify whether the effects of the infraction in question can be reversed through subsequent actions, called rectification. Or, if, on the contrary, we are facing an infraction in which rectification is materially impossible to comply with (…)" (Highlight added).

17. That, from what has been evaluated in the preceding recitals, it is concluded that the arguments presented by the Issuer in its reconsideration appeal do not justify revoking or varying what was resolved in the Challenged Resolution, so its reconsideration appeal must be declared unfounded in the part referring to the late submission of the audited consolidated annual financial statements for the 2020 fiscal year;

In accordance with the provisions of numerals 14, 22 and 36 of article 43 of the Regulation of Organization and Functions of the Superintendence of the Securities Market, approved by Supreme Decree No. 216-2011-EF;

RESOLVES:

Article 1.- Declare UNFOUNDED the reconsideration appeal filed by Casa Grande Sociedad Anónima Abierta against the

[23] “Article 1. Definition, purpose and functions of the Superintendency of the Securities Market (SMV) The Superintendency of the Securities Market (SMV) is a specialized technical body attached to the Ministry of Economy and Finance whose purpose is to ensure the protection of investors, the efficiency and transparency of the markets under its supervision, the correct formation of prices and the dissemination of all information necessary for such purposes, through regulation, supervision and promotion. It has legal personality under internal public law and enjoys functional, administrative, economic, technical and budgetary autonomy, constituting a budgetary unit. Its operation is governed in accordance with the provisions contained in this Law and its organization and functions regulations (…)”.

[24] ZUÑIGA ARBILDO, Natalia. Op. cit. Link: https://agnitio.pe/articulo/no-basta-con-pedir-perdon-la-interpretacion-de-oefa-respecto-a-la-causal-de-eximente-de-responsabilidad-por-subsanacion-voluntaria/

Deputy Superintendent Resolution SMV No. 010-2024-SMV/11, in the part referring to the late submission of the audited consolidated annual financial statements for fiscal year 2020.

Article 2.- Confirm Deputy Superintendent Resolution SMV No. 010-2024-SMV/11, in the part that sanctioned Casa Grande Sociedad Anónima Abierta with a fine of 4.12 UIT equivalent to S/ 18,128.00 (Eighteen Thousand One Hundred Twenty-Eight and 00/100 Soles), for having submitted late the audited consolidated annual financial statements for fiscal year 2020.

Article 3.- Declare the administrative remedy exhausted, in the part referring to the late submission of the audited consolidated annual financial statements for fiscal year 2020.

Article 4.- Transcribe this Resolution to Casa Grande Sociedad Anónima Abierta.

Carlos Rivero Zevallos
Deputy Superintendent (e)
Deputy Superintendency of Market Conduct Supervision

Resolution No. 021-2024-SMV/11 of the Deputy Superintendency of Market Conduct Supervision: Reconsideration Appeal by Casa Grande S.A.A.

Superintendency Resolution Adjunct SMV No. 021-2024-SMV/11

VISTO:

CONSIDERANDO:

I. FUNCIÓN Y COMPETENCIA DE LA SASCM

II. HECHOS

III. ISSUES TO BE DETERMINED

IV. ANALYSIS

4.1. OF THE APPEAL REMEDY

4.2. EVALUATION OF THE RECONSIDERATION APPEAL

1. ON THE NATIONAL STATE OF EMERGENCY DUE TO COVID-19 AS A CASE OF FORCE MAJEURE

EVALUATION

2. ON THE VOLUNTARY REMEDIATION OF THE INFRACTION

EVALUATION

RESOLVES:

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