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Superintendency Resolution Adjunta SMV No. 058-2024-SMV/11

Lima, 20 September 2024

Summary: Sanction Unión de Cervecerías Peruanas Backus y Johnston S.A.A. with one (1) fine of 2.5 UIT for having incurred one (1) infraction of a minor nature, classified in subsection 3.7 numeral 3 of Annex I of the Sanctions Regulation

Administered : UNIÓN DE CERVECERÍAS PERUANAS BACKUS Y JOHNSTON S.A.A.
Subject
: Administrative Sanctioning Procedure of double administrative instance Main Type :
Subsection 3.7 of numeral 3 of Annex I of the Sanctions Regulation MINOR INFRACTION File No. : 2024001430

The Deputy Superintendent of Supervision of
Market Conducts

SEEN:

Administrative file No. 2024001430, containing the administrative sanctioning procedure initiated by the General Intendancy of Compliance of Conducts of the Superintendency of the Securities Market – SMV (hereinafter, the IGCC), against Unión de Cervecerías Peruanas Backus y Johnston S.A.A. (hereinafter, the Issuer); as well as Report No. 735-2024-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 knowledge of the Deputy Superintendency of Supervision of Market Conducts of the SMV (hereinafter, SASCM), the PAS of administrative file No. 2024001430 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 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 tending to revert the situation altered by the commission of the infraction;

II. FACTS, CHARGE, DISCHARGES 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 section of Economic Group of the Institutional Page of the SMV it was observed that its represented sent on 30 March 2022 the Report on its Economic Group according to the Information Formats on Economic Group (File No. 2022013455), registering as of 31 December 2020 and 2021 the concepts of total amount of assets and equity of the companies that make up its economic group;

4. That, on 31 March 2023 it sent to the SMV the report of its economic group jointly with the Annual Report and Annual Individual Financial Statements of the 2022 fiscal year (File No. 2023014933), in which it is noted that the same data of total assets and equity reported on 30 March 2022 appear in relation to the 2021 fiscal year, data that are in File No. 2022013455, as can be seen below:

Image No. 1: Information of total assets and equity contained in the Economic Group Report

PERU Ministry of Economy and Finance
SMV
Superintendency of the Market in Securities

"Decade of Equal Opportunities for Women and Men" "Year of the Bicentennial, of the consolidation of our Independence, and of the commemoration of the heroic battles of Junín and Ayacucho"

5. That, likewise, 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. 2023014933 were different or had varied in relation to the amount indicated in the Economic Group Report submitted together with said financial statements; therefore, given a change in relation to 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 data presented at the close of fiscal years 2020 and 2021;

6. That, by means of Official Letter No. 366-2024-SMV/11.2 of 04 April 2024 (hereinafter, Charge Letter), the commission of the infraction typified in subsection 3.7 of numeral 3 of Annex I of the Sanctions Regulation was imputed;

2.3 Discharges and arguments

7. That, the Issuer, exercising its right of defense, by means of a writing of 18 April 2024, regarding the imputations formulated against it, the Issuer stated the following:

(i) Under the protection of the provisions of literal a) of article 26 of the Sanctions Regulation, it expressly and unconditionally acknowledges its responsibility for the imputed infraction and requests that, in application of the mitigating circumstance of responsibility, if the company were sanctioned with a fine, it be reduced by 50%.

(ii) Regarding the sanction criteria, it should be taken into account that the infraction occurred due to an involuntary omission of the internal team in charge of updating the economic group report, which would not have generated any economic harm to the market, that it would not have obtained an illicit benefit as a result of the infraction, the probability of detection of the infraction would be high, it would not have generated harm to the public interest or any third party and there would also be no intentionality in committing the infraction.

8. That, the TUO of the LPAG 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 seriousness of the harm to the public interest and/or protected legal interest, (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;

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

10. That, in observance of the provisions of numeral 5 of article 255 of the TUO of the LPAG, by means of Official Letter No. 2985-2024-SMV/11 of 11 July 2024, the Report was sent to the Issuer so that it may formulate its arguments within

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within the term of five (05) business days; however, to date it has not submitted arguments to the Report;

III. ISSUES TO BE DETERMINED

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

(i) Whether or not the Issuer incurred 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

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

"(...) Legal persons registered in the Registry and the issuer of registered securities are obliged to submit the information that this law and other general provisions establish, being responsible for the veracity of said information."

13. 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, made up of at least two entities, when one of them exercises control over the other or others or when control over the entities corresponds to one or several natural persons acting as a decision unit. Natural persons do not form part of the economic group."

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

"Issuers of securities registered in the Registry, legal persons registered therein, and the EAFC are obliged to submit 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);

15. That, regarding the timing of the submission of information, the second paragraph of article 9 of the Economic Group Regulation establishes1:

[1] Second paragraph of article 9 of the Regulation of Economic Groups modified by Article 6 of SMV Resolution No. 019-2021-SMV/01, published on 30 October 2021, whose previous text is as follows: “In the event that any change occurs in the information reported on the economic group, the information must be updated no later than 31 March of the following year of 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

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“In the event that any change occurs in the information reported on the economic group, the information must be updated and presented at the same opportunity 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 preceding 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);

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

“Article 10.- TECHNICAL SPECIFICATIONS FOR SUBMITTING INFORMATION ON ECONOMIC GROUPS The information submitted 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.”;

17. 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 Economic Group Information Formats, approved by Superintendent Resolution No. 083-2016-SMV/02 of 15 June 2016;

18. That, in this regard, section “II.a Entities that make up the Economic Group” of the Economic Group Information Formats contains the 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 preceding the date of presentation of the Economic Group information”, so this information can be updated periodically each year with data of total assets and equity as of the fiscal year immediately preceding the date of presentation;

4.2 Evaluation of the case

19. That, in file No. 2024001430 containing the documentation of this PAS, it is observed that Memorandum No. 3078-2023-SMV/11.1 of 24 July 2023 (File No. 2023031767), the General Superintendence of Conduct Supervision (hereinafter, IGSC) —an organ of the Superintendence of the Securities Market – SMV which has among its functions and powers the supervision of compliance with the rules applicable to issuers with securities registered in the RPMV—, sent to the IGCC the result of its evaluation, and specifically what refers to the present case;

20. 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

[*] entity responsible for the centralized negotiation mechanism in which the securities are registered.” (Underline added).

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 report of indications of infringement of the IGSC is not binding for the IGCC, as established in the second paragraph of article 9 of the Sanctions Regulation2 3 ;

21. That, in this way, it is established that in the evaluation of the facts related to this PAS, two (2) other organs of the Superintendence 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 through the aforementioned memorandum and then the IGCC which, as a result of its evaluation, formulated the Charge Letter 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 mentioned charge, it being necessary to indicate that by the nature of the same, it will be a decision of first administrative instance;

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

23. That, the Issuer did not submit the arguments corresponding to the Report, despite being duly notified, physically, on 18 July 2024;

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. 2023014933, were different or had varied in relation to the amount indicated in the Economic Group Report submitted jointly with said financial statements; therefore, since there was a change in relation to 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 data presented at the close of fiscal years 2020 and 2021;

25. That, on this matter, through its brief of defenses, the Issuer has expressly acknowledged its responsibility for the commission

[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 of 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 of the initiation of 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

[3] (…) When said bodies conclude that there are sufficient indications of possible administrative infractions, they refer the corresponding reports to the General Compliance Intendancies, which determine whether or not to initiate an administrative sanctioning procedure. If applicable, the General Compliance Intendancies may carry out 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 Intendancy of Research and Innovation, a dependency that, if there are sufficient indications of possible administrative infractions, will determine whether or not to initiate an administrative sanctioning procedure. (…).

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of the imputed infraction, by virtue of the provisions of literal a) of numeral 2 of article 257 of the TUO of the LPAG;

26. That, in that sense, it should be noted that the voluntary declaration of acknowledgment of the infraction by the Issuer is considered as a mitigating condition of responsibility, so that when the applicable sanction is a fine, it is reduced by fifty percent (50%) if the acknowledgment is submitted within the period granted to submit defenses, in accordance with numeral 1 of literal a) of article 26 of the Sanctions Regulation4, which will be considered at the time of determining the sanction;

27. That, likewise, it should be noted that, although on 28 March 2024 the Issuer submitted to the SMV the report of its economic group jointly with the Annual Report and Annual Individual Financial Statements for fiscal year 2023 (File No. 2024013819), it can be verified that it again submitted the same data of total assets and equity reported on 30 March 2022 in relation to fiscal year 2021, therefore, the Issuer has not complied with correcting the imputed infraction;

28. 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 provisions of the principle of reasonableness and the sanction criteria, considering that the Issuer has acknowledged the infraction after the charge document; which will be evaluated in the section on determination of the sanction;

V. DETERMINATION OF THE SANCTION

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

“Not submitting to the SMV or, when applicable, to the entity responsible for a centralized negotiation mechanism, or not keeping updated, the information on its Economic Group, as well as not informing the SMV of share transfers that imply a change in the decision or control unit, or any modification of the data in the Public Registry of the Securities Market, within the period or form established in the relevant regulations.” (Underline added);

30. That, in accordance with article 35 of the Sanctions Regulation, said infraction is punishable with a warning or a fine of not less than one (01) UIT and up to twenty-five (25) UIT;

31. That, in that sense, 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

[4] “Article 26.- Mitigating circumstances of liability for infractions The following constitute mitigating circumstances of liability for infractions: a) Express and written acknowledgment of responsibility by the offender, once the administrative sanctioning procedure has been initiated. When the applicable sanction is a fine, it is reduced, taking into account the following: 1. If the acknowledgment of the infraction is presented within the period granted for the submission of defenses, the reduction amount shall be fifty percent (50%). (…)”.

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for the graduation of the sanction, these being: (i) the issuer's sanction history, (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 protected legal interest and (viii) the existence or not of intent in the offender's conduct;

32. That, in relation to the severity of the harm to the public interest and/or protected legal interest, it is relevant to note that in relation to the severity of the harm to the public interest and/or protected legal interest, it must be indicated that the timely submission of the Economic Group Report by the 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 a severity of harm to the public interest is not evidenced, the failure to comply with the obligation to inform the market within the deadlines by the issuers affects market transparency, which is considered a protected legal interest;

33. That, regarding the sanction history, literal a) of article 25 of the Sanctions Regulation establishes that these are the 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 (in the present case, March 31, 2023); notwithstanding this, it is specified that the commission of the same infraction in the year prior to the infraction to be sanctioned is not considered as a history. On this matter, from the verification carried out in the SMV Sanctions System, it has been determined that the Issuer has a sanction history, as detailed in the Report;

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

35. That, in relation to the circumstances of the commission of the infraction, it has been verified that the Issuer would not have updated the information about its economic group since March 30, 2022, recording as of December 31, 2020 and 2021 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 December 31, 2022. It should be noted that, as of the date of preparation of this report, the Issuer has not complied with correcting the imputed infraction;

36. That, regarding 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;

37. 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;

38. That, regarding the probability of detection of the committed infraction, it must be noted that the probability is high, because this type of non-compliance is corroborated by the SMV itself through periodic control actions;

39. That, in relation to the existence or not of intent in the offender's conduct, it can be stated that there are not sufficient elements to indicate that the Issuer acted with intent in the commission of the infraction, 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 intent, 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;

40. That, in this sense, in application of the Sanction Criteria developed above, it is observed that the committed infraction has not caused a concrete harm to investors, the Issuer has not obtained a benefit from its illegal conduct, nor has it been proven that it acted with intent, in addition to the fact that the Issuer has acknowledged the infraction. However, the Issuer has five (5) sanction records for serious and minor infractions, as indicated in the Report. Likewise, it must be taken into account that the Issuer to date has not yet complied with correcting the infraction subject to imputation in the present case;

41. That, taking into account the Sanction Criteria detailed previously and the evaluation carried out by this Deputy Superintendency, a fine of 5 UIT5 equivalent to S/ must be applied to the Issuer. 24,750.00 (Twenty-Four Thousand Seven Hundred Fifty and 00/100 Soles), in accordance with article 35 of the Sanction Regulations;

ACKNOWLEDGMENT OF LIABILITY FOR INFRINGEMENT

42. That, as previously indicated, the Issuer stated in its defenses that it expressly and in writing assumed its responsibility for the infringement subject to charges; therefore, in application of the fifty percent (50%) reduction, by virtue of the acknowledgment of liability pursuant to the provisions of literal a) of article 26 of the Sanction Regulations, a total fine of 2.5 UIT equivalent to S/ 12,375.00 (Twelve Thousand Three Hundred Seventy-Five and 00/100 Soles) must be applied to the Issuer.

In accordance with the provisions of numerals 14 and 36 of article 43 of the Regulations on Organization and Functions of the Superintendency of the Securities Market – SMV, approved by Supreme Decree No. 216-2011-EF;

RESOLVES:

Article 1.- To declare that Unión de Cervecerías Peruanas Backus y Johnston S.A.A. has incurred in one (1) infringement of a minor nature, classified in subsection 3.7 of numeral 3 of Annex I of the Sanction Regulations, approved by SMV Resolution No. 035-2018-SMV/01, for not having updated the information regarding its Economic Group within the term and in the manner established in the regulation, as of the date of imputation of charges.

Article 2.- To sanction Unión de Cervecerías Peruanas Backus y Johnston S.A.A. with a fine of 2.5 UIT equivalent to S/ 12,375.00

[5] Supreme Decree No. 309-2022-EF set the UIT for fiscal year 2023 at S/ 4,950.00.

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(Twelve Thousand Three Hundred Seventy-Five and 00/100 Soles), by virtue of the provisions of article 1 of this Resolution.

Article 3.- This Resolution does not exhaust the administrative remedy, and it may be challenged before this Deputy Superintendency of Market Conduct Supervision by filing reconsideration and 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 a term of fifteen (15) business days, counted from the day following its notification.

Article 4.- In the event that 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 Sanction Regulations, approved by SMV Resolution No. 035-2018-SMV/01.

Article 5.- To transcribe this Resolution to Unión de Cervecerías Peruanas Backus y Johnston S.A.A.

Signed by: RIVERO ZEVALLOS Carlos Fabian FAU 2013 Reason:

Carlos Rivero Zevallos
Deputy Superintendent
Deputy Superintendency of Market Conduct Supervision

Signed by: MENESES CAMARGO Carlos Er Reason: