Superintendencia Adjunta SMV Resolution No. 047-2024-SMV/11

Lima, 01 August 2024

Summary: Sanction Empresa Agrícola San Juan S.A. with one (1) reprimand for having incurred one (1) minor infraction, classified in subsection 3.7 numeral 3 of Annex I of the Sanctions Regulation.

Administered entity : EMPRESA AGRÍCOLA SAN JUAN S.A.
Subject
: Administrative Sanctioning Procedure of dual instance administrative Main Type :
Subsection 3.7 of numeral 3 of Annex I of the Sanctions Regulation MINOR INFRACTION File No. : 2024006000

The Deputy Superintendent (e) of Supervision of Market Conduct

VIEWS:

Administrative file No. 2024006000, containing the administrative sanctioning procedure initiated by the General Intendancy of Conduct Compliance of the Superintendency of the Securities Market – SMV (hereinafter, the IGCC), against Empresa Agrícola San Juan S.A. (hereinafter, the Issuer); as well as Report No. 748-2024-SMV/11.2 (hereinafter, the Report), issued by the IGCC;

CONSIDERING:

I. FUNCTION AND COMPETENCE OF THE SASCM

1. That, the IGCC —instructing body of the administrative sanctioning procedures (hereinafter, the PAS) referred to in the present case—, has brought to the attention of the Deputy Superintendency of Supervision of Market Conduct of the SMV (hereinafter, SASCM), the PAS of administrative file No. 2024006000 in order for it to issue a decision as sanctioning body of sole instance in said PAS. In this way, the SASCM assumes competence in observance of the exercise of the supervision function and the sanctioning power of the Superintendency of the Securities Market - SMV established by the Single Concorded Text of its Organic Law, Legislative Decree No. 26126 (hereinafter, Organic Law of the SMV), and in the Single Ordered Text of the Securities Market Law, Legislative Decree No. 861, approved by Supreme Decree No. 020-2023-EF (hereinafter, TUO of the LMV); as well as by the provisions of the Sanctions Regulation, approved by SMV Resolution No. 035-2018-SMV/01 (hereinafter, Sanctions Regulation) and in articles 42 and 43 of the Regulation of Organization and Functions of the SMV, approved by Supreme Decree No. 216-2011-EF (hereinafter, ROF of the SMV), in the sense that it is a specific function of the SASCM to impose sanctions in first administrative instance for the commission of infractions whose compliance control according to its competences corresponds to said Deputy Superintendency. Likewise, the SASCM has the powers to issue corrective measures aimed at reverting the situation altered by the commission of the infraction;

II. FACTS, CHARGE, DEFENSES AND ALLEGATIONS

2.1 Fact

2. That, it was evaluated whether the Issuer complied with its obligation to present or keep updated the information about its Economic Group;

2.2 Charge

3. That, from the verification of the information about economic group published in the Economic Group section of the Institutional Page of the SMV it was observed that the Issuer sent on 02 March 2021 the Report on its Economic Group according to the Information Formats on Economic Group (File No. 2021008172), registering as of 31 December 2019 the concepts of total amount of assets and equity of the companies that make up its economic group (Annex 1 of the Report);

4. That, on 30 March 2023 it sent to the SMV the Report of its Economic Group jointly with the Annual Report and Annual Individual Financial Statements of fiscal year 2022 (File No. 2023013806), in which the same data of total assets and equity reported on 02 March 2021 with relation to fiscal year 2019 were noticed, data that appear in File No. 2021008172, as can be seen below:

5. That, as of the date of imputation of charges, the total amount of assets and the equity recorded in the Annual Individual Financial Statements of fiscal year 2022 presented in File No. 2023013806 (Annex No. 2 of the Report), were different or had varied with relation to the amount indicated in the Economic Group Report presented jointly with said financial statements; therefore, having occurred a change in relation to the section “II.a Entities that make up the Economic Group” the Issuer should have updated the information about its Economic Group and not record the same data presented at the close of fiscal year 2019;

6. That, by means of Official Letter No. 1059-2024-SMV/11.2 of 04 April 2024 (hereinafter, the Charge Letter), the IGCC imputed to the Issuer the commission of the infraction classified in subsection 3.7 of numeral 3 of Annex I of the Sanctions Regulation;

7. That, likewise, as of the date it is observed that the noncompliance indicated in the previous paragraph has been corrected, given that on 18 April 2024 (File No. 2024017071) the Issuer presented the Economic Group Report updating the concepts of total amount of assets and equity as of 31 December 2023, in accordance with what was reported in the Annual Report and Annual Individual Financial Statements of fiscal year 2023 (Annex No. 3 of the Report);

2.3 Defenses and allegations

8. That, the Issuer exercising its right of defense, by means of a writing of 18 April 2024, with respect to the imputations formulated against it, the Issuer indicated that it proceeded to remedy the indicated observation with respect to the amount of assets and equity recorded in the Annual Individual Financial Statements of fiscal year 2022 in relation to the amount indicated in the Economic Group Report, updating the information for the year 2023, which coincides with the Financial Statements of fiscal year 2023. Likewise, they indicated that it was a material error on the part of the person who entered the information;

9. That, by Supreme Decree No. 004-2019-JUS, the Single Ordered Text of the General Administrative Procedure Law – Law No. 27444 (hereinafter, TUO of the LPAG) was approved, which contains common rules for the actions of the administrative function of the State and regulates all administrative procedures developed in the entities, including special procedures. Likewise, numeral 3) of article 248 of the TUO of the LPAG indicates the criteria regarding the graduation of the sanction: (a) The illicit benefit resulting from the commission of the infraction, (b) The probability of detection of the infraction, (c) The severity of the damage to the public interest and/or protected legal right, (d) The economic harm caused, (e) Recidivism, for the commission of the same infraction within the term of one (1) year from when the resolution that sanctioned the first infraction became final, (f) The circumstances of the commission of the infraction; and, (g) The existence or not of intentionality in the conduct of the offender;

10. That, the charge formulated, the defenses and the criteria regarding the graduation of the sanction have been subject to evaluation in the Report, which has been brought to the attention of the SASCM;

11. That, in observance of the provisions of numeral 5 of article 255 of the TUO of the LPAG, by Official Letter No. 2994-2024-SMV/11 of 12 July 2024, the Report was sent to the Issuer so that it may formulate its arguments within the term of five (05) business days; which to date have not been presented;

III. ISSUES TO BE DETERMINED

12. That, in the present PAS it corresponds to determine the following:

(i) Whether or not the Issuer incurred in the infraction indicated in the Charge Letter and Report.

(ii) Whether or not it corresponds to impose a sanction on the Issuer.

IV. ANALYSIS

4.1 Applicable regulations

13. That, article 13 of the TUO of the LMV establishes that:

"(…) Legal entities registered in the Registry and the issuer of registered securities are obligated to present the information that this law and other general provisions establish, being responsible for the veracity of said information.";

14. That, article 7 of the Regulation of Indirect Ownership, Linkage and Economic Groups, approved by SMV Resolution No. 019-2015-SMV-01 and amendments (hereinafter, the Economic Group Regulation), establishes the definition of Economic Group:

"Article 7.- DEFINITION OF ECONOMIC GROUP Economic Group is the set of entities, national or foreign, conformed by at least two entities, when any of them exercises control over the other or others or when the control over the entities corresponds to one or several natural persons who act as a decision unit. Natural persons do not form part of the economic group.";

15. That, in relation to the obligation of presenting information of the Economic Group, article 8 of the Economic Group Regulation provides:

"The issuers of securities registered in the Registry, the legal entities registered therein, and the EAFC are obligated to present to the SMV and when applicable to the entity responsible for a centralized negotiation mechanism in which said securities are registered, the reports on their Economic Group, in accordance with the formats established by the SMV. (Underline added);

16. That, regarding the timeliness of the presentation of the information, the second paragraph of article 9 of the Economic Group Regulation establishes1:

[1] Second paragraph of article 9 of the Economic Groups Regulation modified by Article 6 of SMV Resolution No. 019-2021-SMV/01, published on 30 October 2021, whose previous text is as follows:

"In case any change occurs in the reported information on economic group, the information must be updated and presented at the same time and jointly with the Annual Report of the obligated subject, unless the change qualifies as a material fact or relevant fact, in which case, without prejudice to the respective communication, the obligated subject must update said information within the following fifteen (15) calendar days. Said update must be made in accordance with the formats indicated in the first paragraph of the previous article and when applicable must also be sent to the entity responsible for the centralized negotiation mechanism in which the securities are registered." (Underline added);

17. That, in relation to the form of presentation of the Economic Group information, the provisions in articles 8 and 9 preceding are pertinent, as well as the provisions in article 10 of the Economic Group Regulation:

"Article 10.- TECHNICAL SPECIFICATIONS FOR SUBMITTING INFORMATION ON ECONOMIC GROUPS The information presented to the SMV in compliance with the provisions of the preceding articles must observe the formats and technical specifications approved by the Superintendent of the Securities Market.";

18. That, in that sense, the obligated entities must comply with the update and presentation of the information on their economic group through the Economic Group Report, in accordance with the Information Formats on Economic Group, approved by Superintendent Resolution No. 083-2016-SMV/02 of 15 June 2016;

19. That, in this regard, section "II.a Entities that make up the Economic Group" of the Information Formats on Economic Group contains numeral "vii. Total value of assets and equity: Indicate amount and currency" and it is indicated "Note (1) The data of Total Assets and Equity shall refer to the fiscal year immediately prior to the date of presentation of the Economic Groups information", so this information can be updated periodically each year with data of total assets and equity as of the fiscal year immediately prior to the date of presentation;

4.2 Evaluation of the case

20. That, in file No. 2024006000 containing the documentation of this PAS, it is noted that by Memorandum No. 3246-2022-SMV/11.1 of 21 July 2022 (File No. 2022029956) and Memorandum No. 3009-2023-SMV/11.1 of 24 July 2023 (File No. 2023031668), the General Superintendence of Conduct Supervision (hereinafter, IGSC) —an organ of the Superintendency of the Securities Market – SMV which has among its functions and powers the supervision of compliance with the rules applicable to issuers with

[*] “In the event that any change occurs in the reported information on economic group, the information must be updated no later than 31 March of the year following its occurrence, unless the change qualifies as a material fact or relevant fact, in which case, without prejudice to the respective communication as such, the obligated subject must update said information within the following fifteen (15) calendar days. Said update must be made in accordance with the formats indicated in the first paragraph of the preceding article and, when applicable, must also be sent to the entity responsible for the centralized negotiation mechanism in which the securities are registered.” (Underlining added).

securities registered in the RPMV—, forwarded to the IGCC the result of its evaluation, and specifically that referring to the present case;

21. That, it must be borne in mind that the procedures and legal forms with which the IGSC conducts its inspection and/or supervision activity and, upon concluding it with a report of indications of infringement, determine that its pronouncement or opinion on a specific supervision matter —which may even contain a decision, such as, for example, the adoption of corrective measures—, is an opinion on the merits of the matter; it being necessary to specify that said opinion and the IGSC's report of indications of infringement is not binding on the IGCC, as established in the second paragraph of article 9 of the Sanctions Regulation2 3 ;

22. That, in this way, it follows that in the evaluation of the facts related to this PAS, two (2) other organs of the Superintendency of the Securities Market – SMV, functionally independent from each other and from this Office, have intervened and participated prior to the issuance of this resolution; first the IGSC, which in due course reported the indications of infringement by means of the aforementioned memorandum, and then the IGCC, which, as a result of its evaluation, formulated the Statement of Charges and the Report; and at this point of the PAS it corresponds to the Office of the SASCM to issue a pronouncement containing its decision regarding the aforementioned charge, it being necessary to state that, by its nature, it will be a first-instance administrative decision;

23. That, previously, it must be noted that by written submission of 18 April 2024, the Issuer presented its defenses regarding the imputations formulated against it in this file;

24. That, in the present case, as of the date of imputation of charges, the total amount of assets and equity recorded in the Annual Individual Financial Statements for fiscal year 2022 submitted in File No. 2023013806 (Annex No. 2), were different or had varied in relation to the amount indicated in the Economic Group Report submitted together with said financial statements; therefore, having occurred a change in relation to the section “II.a Entities that make up the Economic Group”, the Issuer should have updated the information on its Economic Group and not record the same amounts presented at the close of fiscal year

[2] Article 245 of the TUO of the LPAG states as forms or modes in which the inspection activity could be concluded the following: 1) Record of conformity of the activity carried out by the administered party; 2) Recommendation of improvements or corrections to the activity carried out by the administered party; 3) The warning of the existence of non-compliances not susceptible of warranting the determination of administrative responsibilities; 4) The recommendation to initiate a procedure in order to determine the corresponding administrative responsibilities; 5) The adoption of corrective measures and 6) Other forms as established by special laws.

[3] Article 9.- PRELIMINARY INQUIRIES AS A CONSEQUENCE OF SUPERVISION ACTIONS (…) When said organs conclude that there are sufficient indications of possible administrative infractions, they forward the corresponding reports to the General Superintendences of Compliance, which determine whether or not to initiate an administrative sanctioning procedure. If applicable, the General Superintendences of Compliance may conduct additional inspections or investigations of the reported indications. In the case of possible infractions in the scope of the Regulation of the Financial Participatory Financing Activity and its Managing Companies, the preliminary inquiries are carried out by the General Superintendence of Research and Innovation, a dependency that, if sufficient indications of possible administrative infractions exist, will determine whether or not to initiate an administrative sanctioning procedure. (…).

2019;

25. That, as of the date, it is observed that the non-compliance indicated in the preceding paragraph has been corrected, given that on 18 April 2024 (File No. 2024017071) the Issuer submitted the Economic Group Report updating the concepts of total amount of assets and equity as of 31 December 2023, in accordance with what was reported in the Annual Report and Annual Individual Financial Statements for fiscal year 2023;

26. That, consequently, having proven the conduct constituting the infraction and determined the administrative responsibility of the Issuer, it is appropriate to analyze the proposed sanction in accordance with the principle of reasonableness and the sanction criteria, considering that the Issuer has corrected the infraction after the notice of charges; which will be evaluated in the section on determination of the sanction;

V. DETERMINATION OF THE SANCTION

27. That, having determined the existence of administrative responsibility on the part of the Issuer, for the commission of one (1) infraction classified in subsection 3.7 of numeral 3 of Annex I of the Sanctions Regulation, which states that it constitutes a minor infraction:

"Failure to submit to the SMV or, where applicable, to the entity responsible for a centralized trading mechanism, or failure to keep updated, the information regarding its Economic Group, as well as failure to inform the SMV of share transfers that imply a change in the decision-making or control unit, or any modification of the data in the Public Registry of the Securities Market, within the term or in the manner established in the applicable regulations." (Underline added);

28. That, in accordance with article 35 of the Sanctions Regulation, said infraction is punishable by a warning or a fine of no less than one (01) UIT and up to twenty-five (25) UIT;

29. That, in this regard, it is appropriate to determine the sanction to be imposed on the Issuer considering the sanction criteria established in article 344 of the TUO of the LMV, numeral 3) of article 248 of the TUO of the LPAG and the provisions of article 25 of the Sanctions Regulation, which develop the criteria for grading the sanction, these being: (i) the issuer's sanction record, (ii) recidivism, (iii) the circumstances of the commission of the infraction, (iv) the economic harm caused and its impact on the market, (v) the illicit benefit resulting from the commission of the infraction, (vi) the probability of detection of the infraction, (vii) the severity of the harm to the public interest and/or the protected legal interest and (viii) the existence or not of intent in the conduct of the offender (hereinafter, Sanction Criteria);

30. That, with regard to the severity of the harm to the public interest and/or the protected legal interest, it is relevant to note that in relation to the severity of the harm to the public interest and/or the protected legal interest, it must be stated that the timely submission of the Economic Group Report by issuers of securities registered in the Public Registry of the Securities Market constitutes a fundamental obligation in the transparency of the securities market, so that market participants can make their investment decisions adequately informed. Therefore, although no severity of harm to the public interest is evidenced, the failure of issuers to comply with the obligation to inform the market within the deadlines affects market transparency, which is considered a protected legal interest;

31. That, with respect to the sanction record, literal a) of article 25 of the Sanctions Regulation establishes that these are final sanctions imposed by the Superintendency of the Securities Market – SMV within the period of four (4) years prior to the commission of the infraction to be sanctioned (on 02 March 2021, the date on which the infraction was committed); notwithstanding this, it is clarified that the commission of the same infraction in the year prior to the infraction to be sanctioned is not considered as a record. In this regard, from the verification carried out in the SMV Sanctions System, it has been determined that the Issuer has a sanction record, having been sanctioned for a different type of infraction, through seven (07) resolutions detailed below:

No.	Resolution	Date of finality	Sanction
01	Deputy Superintendency Resolution SMV No. 124-2017-SMV/11	10/01/2018	One (01) warning, for having incurred one (01) infraction of a minor nature classified in subsection 3.4, numeral 3 of Annex I of the Sanctions Regulation.
02	Deputy Superintendency Resolution SMV No. 128-2017-SMV/11.1	06/03/2018	One (01) fine of 7.24 UIT, for having incurred infractions of a minor nature classified in subsection 3.1, numeral 3 of Annex I of the Sanctions Regulation.
03	Deputy Superintendency Resolution SMV No. 090-2018-SMV/11	15/10/2018	One (01) fine of 1 UIT, for having incurred infractions of a minor nature, classified in subsections 3.1 and 3.4, numeral 3 of Annex I of the Sanctions Regulation.
04	Deputy Superintendency Resolution SMV No. 103-2018-SMV/11	03/12/2018	One (01) fine of 8.06 UIT, for having incurred infractions of a minor nature, classified in subsection 3.1, numeral 3 of Annex I of the Sanctions Regulation.
05	Deputy Superintendency Resolution SMV No. 110-2018-SMV/11	05/07/2019	One (01) fine of 72.20 UIT, for having incurred infractions of a very serious and serious nature, classified in subsection 1.1, numeral 1 of Annex I and in subsection 2.14, numeral 2 of Annex I of the Sanctions Regulation.
06	Deputy Superintendency Resolution SMV No. 011-2019-SMV/11	08/08/2019	Three (03) warnings for having incurred infractions of a minor nature, classified in subsection 3.1, numeral 3 of Annex I of the Sanctions Regulation
07	Deputy Superintendency Resolution SMV No. 155-2019-SMV/11	03/01/2020	One (01) fine of 5 UIT, for having incurred one (1) infraction of a serious nature classified in subsection 2.5, numeral 2 of Annex I of the Sanctions Regulation.

32. That, regarding recidivism of the offender, literal b) of article 25 of the Sanctions Regulation establishes that account is taken of any final sanction imposed by the SMV within the period of one (1) year prior to the commission of the infraction to be sanctioned. In this regard, it has been verified that there is no recidivism on the part of the Issuer;

33. That, in relation to the circumstances of the commission of the infraction, it has been verified that the Issuer had not updated the information about its economic group since 02 March 2021, recording as of 31 December 2019 the concepts of total amount of assets and equity of the companies that make up its economic group, when it should have been updated as of 31 December 2022. However, on 18 April 2024 (File No. 2024017071) the Issuer has corrected the infraction by updating the concepts of total amount of assets and equity as of 31 December 2023, in accordance with what was reported in the Annual Report and Annual Individual Financial Statements for fiscal year 2023;

34. That, with respect to the economic harm and its impact on the market, it has not been evidenced that the non-compliance has produced a quantifiable harm, understood as an economic damage caused to one or several investors;

35. That, in relation to the illicit benefit resulting from the commission of the infraction, it can be stated that there are not sufficient elements to indicate that the Issuer obtained an illegal benefit as a consequence of the commission of the infraction under evaluation in the present PAS;

36. That, with respect to the probability of detection of the infraction committed, it must be noted that the probability is high, because this class of non-compliances are corroborated by the SMV itself through periodic control actions;

37. That, in relation to the existence or not of intentionality in the conduct of the offender, it can be stated that there are not sufficient elements to indicate that the Issuer acted with intent in the commission of the infractions, so this criterion would not have been configured. However, it is necessary to indicate that although there is no evidence to indicate that the Issuer acted with intentionality, it can be affirmed that the Issuer's conduct was negligent, by not having acted with the required diligence before obligations already known to the Issuer;

38. That, in this sense, in application of the Sanction Criteria, it is observed that the infraction committed has not caused a concrete harm to the investors, the Issuer has not obtained a benefit from its illegal conduct, nor has it been proven that it acted with intent; likewise, although the Issuer has a sanction record, it is important to take into account the action of the administered party to correct the imputed conduct, complying on 18 April 2024 (File No. 2024017071) with updating the information about its Economic Group with the concepts of total amount of assets and equity as of 31 December 2023; therefore, taking into account the criteria detailed previously, this Deputy Superintendency considers imposing as a sanction one (01) warning for the non-compliance incurred, in accordance with article 35 of the Sanctions Regulation;

39. That, the Issuer is reminded that final resolutions of sanctions imposed by the competent authorities must be reported as a material fact, within the framework of the provisions of article 5 of the Material Facts Regulation, and;

In accordance with the provisions of numerals 13 and 36 of article 43 of the Regulation of Organization and Functions of the Superintendency of the Securities Market – SMV, approved by Supreme Decree No. 216-2011-EF;

RESOLVES:

Article 1.- Declare that Empresa Agrícola San Juan S.A. has incurred in one (1) infraction of a minor nature, typified in subsection 3.7 of numeral 3 of Annex I of the Sanctions Regulation, approved by SMV Resolution No. 035-2018-SMV/01, for not having updated the information about its Economic Group within the term and form established in the norm, as of the date of imputation of charges.

Article 2.- Sanction Empresa Agrícola San Juan S.A. with one (01) warning for not keeping updated the information about its Economic Group within the term and form established in the norm., as provided in article 1 of this Resolution.

Article 3.- This Resolution does not exhaust the administrative route, and it may be challenged before this Deputy Superintendency of Supervision of Market Conducts through the filing of reconsideration or appeal resources, administrative resources recognized in article 218 of the Single Ordered Text of the General Administrative Procedure Law – Law No. 27444, approved by Supreme Decree No. 004-2019-JUS, within the term of fifteen (15) business days, counted from the day following its notification.

Article 4.- In case this Resolution is not subject to challenge, it must be published on the “SMV Institutional Page on the Single Digital Platform of the Peruvian State for Citizen Orientation (www.gob.pe/smv)”, in observance of the provisions of numeral 1 of article 7 of the “Policy on dissemination of regulatory projects, general legal norms, early agenda and other administrative acts of the SMV”, approved by SMV Resolution No. 014-2014-SMV/01, and by the provisions of the last paragraph of article 14 of the Sanctions Regulation, approved by SMV Resolution No. 035-2018-SMV/01.

Article 5.- Transcribe this Resolution to Empresa Agrícola San Juan S.A.

Register, communicate and publish,

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