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Superintendent Resolution No. 045-2024-SMV/02

Lima, 16 April 2024

The Superintendent of the Securities Market

WHEREAS:

File No. 2022020817 containing, among others, the appeal filed by Red Bicolor de Comunicaciones S.A.A. - RBC TV S.A.A. (hereinafter, “RBC”), against Deputy Superintendent Resolution SMV No. 017-2023-SMV/11 and Report No. 328-2024-SMV/06 issued by the Legal Advisory Office (hereinafter, the “Legal Report”);

CONSIDERING:

That, by Deputy Superintendent Resolution SMV No. 017-2023-SMV/11 (hereinafter, the “Sanction Resolution”), RBC was sanctioned with a fine of 64 UIT, for having incurred the following infractions:

a) A minor infraction, typified in subsection 3.1, numeral 3 of Annex I of the SMV Sanctions Regulation, approved by SMV Resolution No. 035-2018-SMV/01 (hereinafter, the “Sanctions Regulation”), for not timely submitting its Annual Audited Individual Financial Information corresponding to fiscal year 2019.

b) A minor infraction typified in subsection 3.1, numeral 3 of Annex I of the Sanctions Regulation, for not timely submitting its Annual Report corresponding to fiscal year 2019.

c) A serious infraction typified in subsection 2.10 numeral 2 of Annex I of the Sanctions Regulation, for not submitting its Annual Audited Individual Financial Information corresponding to fiscal year 2021.

d) A serious infraction typified in subsection 2.10 numeral 2 of Annex I of the Sanctions Regulation, for not submitting its Annual Report corresponding to fiscal year 2021.

That, likewise, the Sanction Resolution established the application of two corrective measures:

a) Order that RBC, in accordance with article 21 and numeral 2 of Annex XX «Of Corrective Measures» of the Sanctions Regulation, disseminate through the material fact channel, the Sanction Resolution within a period of five business days, counted from the day following the notification of said resolution.

b) Order that RBC, in accordance with article 21 and numeral 25 of Annex XX «Of Corrective Measures» of the Sanctions Regulation, comply with the obligation to submit its Annual Audited Individual Financial Information and Annual Report corresponding to fiscal year 2021, within a period of thirty business days, counted from the day following the notification of the Sanction Resolution.

That, RBC filed a reconsideration appeal against the two minor infractions and an appeal against the two serious infractions, mentioned above;

That, by Report No. 398-2023-SMV/11.2, the General Intendancy of Conduct Compliance considered that the appeals filed by RBC should be qualified as a single appeal, in application of the actual concurrence of infractions, established in the second paragraph of article 29 of the Sanctions Regulation1 and in order to guarantee the single file rule, in accordance with article 161 of the Single Ordered Text of Law No. 27444, General Administrative Procedure Law, approved by Supreme Decree No. 004-2019-JUS (TUO LPAG);

That, by Memorandum No. 1194-2023-SMV/11, the Deputy Superintendent of Market Conduct Supervision ex officio channeled the reconsideration appeal filed by RBC against the minor infractions, as an appeal, elevating it to the Office of the Superintendent of the Securities Market for its evaluation.

That, by Official Letter No. 1192-2023-SMV/11, RBC was informed of the decision of the Deputy Superintendent of Market Conduct Supervision, to channel its appeals as a single appeal, in order for it to be evaluated in its entirety by the Superintendent of the Securities Market;

That, the Legal Report issued by the Legal Advisory Office was brought to the attention of RBC, by Official Letter No. 1048-2024-SMV/14, granting it a period of five business days, counted from the notification of said official letter, for it to present its arguments, if it deems it pertinent;

ARGUMENTS OF DEFENSE OF RBC

That, RBC indicates that the extemporaneous communication of the Annual Audited Individual Financial Information and Annual Report corresponding to fiscal year 2019, was due to the fact that given the situation at that time the efforts of the company were aimed at overcoming the COVID-19 situation, at the level of all levels of the company (workers, suppliers, directors, etc.);

[1] “Article 29.- CONCURRENCE OF INFRACTIONS (…) Likewise, when several conducts qualify as more than one infraction, the sanction corresponding to the most serious infraction is imposed.”

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That, in that sense, RBC points out that after the urgent actions were completed, it proceeded to communicate the Annual Audited Individual Financial Information and Annual Report corresponding to fiscal year 2019, as is known to the SMV;

That, in relation to the non-communication of the Annual Audited Individual Financial Information and Annual Report corresponding to fiscal year 2021, RBC indicates that at the date of sending said information (31 March 2022), the company was facing a bankruptcy proceeding before INDECOPI, reason why its efforts were mainly aimed at resolving said situation;

That, in this regard, RBC points out that the following must be taken into account:

a) On 25 October 2021, the commencement of the ordinary insolvency proceeding of the company was published in the Insolvency Bulletin of INDECOPI.

b) On 18 July 2022, the Meeting of Creditors of RBC was installed with the participation of 96% of the recognized credits with the right to speak and vote. At said meeting, the following was approved: i) the patrimonial restructuring as the destination of RBC, ii) the continuation of its same administration regime and, iii) the Restructuring Plan.

c) Currently, RBC continues with its activities within the framework of the approved Restructuring Plan, and its debts will be paid under the terms and conditions established in said instrument.

That, likewise, RBC adds that as it has informed in a previous writing, to date its financial statements have been prepared, with their approval pending through the competent corporate bodies so that, after the foregoing, they are communicated to the SMV. However, RBC indicates that, as the SMV is aware, throughout this time there have been some changes in its shareholding due to the issuance of certain regulatory provisions, which have delayed the normal development of the aforementioned activities;

That, RBC maintains that taking into account the foregoing, it will timely communicate regarding the call to the Shareholders' Meeting and regarding the approval of the Audited Annual Individual Financial Information and Annual Report corresponding to fiscal year 2021;

That, on the other hand, RBC questions the correct application to its case of SMV Resolution No. 006-2012-SMV/01, “Criteria Applicable to the Administrative Sanctioning Procedure for Breach of the Rules regulating the Submission of Periodic or Eventual Information”;

That, in that sense, RBC alleges that there is no economic harm caused to any investor in the market nor any other type of harm derived from the non-timely submission or non-submission of the material events indicated as alleged infractions. RBC adds that this is evidenced because to date there has been no claim by shareholders, creditors,

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investors or any other third party regarding the communication of material events, which is recognized in the instruction report and in the Sanction Resolution itself;

That, RBC adds that it has not obtained any economic benefit from the alleged commission of the imputed infractions, which is recognized in the instruction report and in the Sanction Resolution, stating in the latter in recital 39 that “there are not sufficient elements to indicate that the Issuer obtained illegal benefit as a consequence of the commission of the infractions under evaluation”;

That, regarding the probability of detection of the infractions, RBC alleges that: i) it is not plausible that the company considered that it would not be detected at the time of not communicating the imputed information, taking into account that material events are submitted through the MVNet system and, ii) in cases of information requested by the securities market regulation, the probability of detection for non-delivery is quite high, so that not proceeding with the timely communication of the same would not have represented any advantage for the company;

That, in relation to the sanction background, RBC points out that regarding the infractions imputed for the omission in the presentation of the Financial Information and Report corresponding to fiscal year 2021, it does not present recidivism;

That, RBC states that there has also been no intention or malicious direction for the configuration of the alleged infractions, which is recognized in the Sanction Resolution itself in whose recital 45 it is indicated that “intentionality has not been accredited”;

That, RBC indicates that the sanction criteria previously mentioned are framed within numeral 3 of article 248 of the TUO LPAG, the same that refers to the application of the principle of reasonableness in the sanctioning procedure. By virtue of the application of said principle, RBC maintains that in every sanctioning procedure the administered enjoys the fundamental right to be imposed the adequate and proportional sanction to its behavior. Due to this, and in attention to the fact that in the present case the existence of mitigating factors established in the sanction criteria is appreciated, RBC points out that an eventual sanction should be the least harmful possible, since any other type of sanction would be clearly disproportionate and, therefore, contrary to the principle of reasonableness;

EVALUATION OF RBC'S ARGUMENTS

That, from the evaluation carried out, it is appreciated that the appeal filed by RBC complies with the requirements established in articles 124º, 218°, 220° and 221° of the TUO LPAG2, given that it was filed within the term of

[2] “Article 124.- Requirements of writings Every writing presented 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, and in its case, the capacity of representative and of the person whom it represents. 2. The concrete expression of what is requested, the factual grounds that support it and, when possible, the legal grounds.

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fifteen (15) days of notification of the administrative act, indicates the act it appeals and is founded;

That, first of all, it must be noted that the appeals filed by RBC against the Sanction Resolution will be evaluated in their entirety under a single appeal, in accordance with the decision made by the Deputy Superintendent of Market Conduct Supervision in Memorandum No. 1194-2023-SMV/11, a decision that was brought to RBC's attention through Official Letter No. 1192-2023-SMV/11, mentioned above. This is because in the determination of the sanction imposed on RBC in the Sanction Resolution, the sanctions corresponding to the two serious infractions subsumed the sanctions corresponding to the minor infractions, pursuant to the provisions of the second paragraph of article 29 of the Sanctions Regulation, cited above;

That, regarding RBC's arguments referring to the fact that: i) the delay in the delivery of its Annual Audited Individual Financial Information and its Annual Report for fiscal year 2019 was due to the fact that at that time its efforts were focused on overcoming the Covid-19 situation and, ii) that in the case of the omission of the submission of its Annual Audited Individual Financial Information and Annual Report for fiscal year 2021, this was due to the fact that at that date the company was immersed in insolvency proceedings before INDECOPI, it must be noted that such events in no way constitute a justification for RBC's non-compliance with its obligations as a participant in the securities market, because the deadlines for submitting financial information and the annual report were publicly known to the market, so RBC should have acted with sufficient diligence to adapt its internal processes to comply with said obligations3 ;

That, it must be taken into account that the financial information and the annual report constitute relevant elements used by investors and the

[3] Place, date, signature or fingerprint, in case of not knowing how to sign or being prevented from doing so.

[4] The indication of the body, entity or authority to which it is addressed, understood as such, as far as possible, the authority closest in rank 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 under 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 case file of the matter, in the case of procedures already initiated.

Article 218. Administrative appeals

(...)

218.2 The term for filing appeals is fifteen (15) peremptory days, and they must be resolved within thirty (30) days.

Article 220.- Appeal

The appeal shall be filed when the challenge is based on a different interpretation of the evidence produced or when it involves questions of pure law, and must be addressed to the same authority that issued the act being challenged so that it may forward the proceedings to the hierarchical superior.

Article 221.- Requirements of the appeal

The written appeal must state the act being appealed and must comply with the other requirements set forth in article 124.”

[3] It should be noted that even, precisely in light of the Covid-19 pandemic, the deadline for the submission of the audited individual or separate financial information and annual report corresponding to fiscal year 2019 was extended, initially, by SMV Resolution No. 033-2020-SMV/02 until 30 June 2020 and subsequently extended, again, until 31 July 2020, by Superintendent Resolution No. 046-2020-SMV/02.

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market in general for investment decision-making, so an issuer must take special care in the timely fulfillment of the delivery of said information on the dates established by the securities market regulations;

That, likewise, it is important to highlight that in the case of the commission of serious infractions, whose imposition of the sanction in the first instance subsumed the sanction corresponding to the minor infractions, this Office observes that they refer to the non-submission of RBC's Annual Audited Individual Financial Information and Annual Report for fiscal year 2021, information that to date has still not been delivered by RBC;

That, in this regard, it must be specified that the fact that an issuer is subject to insolvency proceedings or that it presents changes in its shareholding in no way suspends compliance with its information reporting obligations in the securities market; on the contrary, it would be expected that the issuer act with sufficient diligence in order to foresee compliance with said obligations, whose dates are publicly known by the market. Due to the foregoing, this Office considers that RBC's arguments do not disprove the commission of the infractions for which it has been sanctioned;

That, regarding the sanction imposed on RBC, it must be taken into account that it incurred in the commission of two minor infractions and two serious infractions. At the time of determining the sanction to be imposed, the sanction corresponding to the serious infractions subsumed that corresponding to the minor infractions, in application of the provisions of the second paragraph of article 29 of the Sanctions Regulation regarding the real concurrence of infractions, determining a fine of 32 UIT for each of the serious infractions incurred by RBC, for which a total sanction of 64 UIT was imposed;

That, in accordance with article 34 of the Sanctions Regulation, serious infractions are punishable with a fine of no less than twenty-five (25) UIT and up to fifty (50) UIT or suspension of the negotiation of securities for up to one (1) year or of the placement of the public offering. In that sense, this Office appreciates that the fine imposed on RBC for each of the serious infractions incurred is within the parameters established by article 34 of the Sanctions Regulation;

That, likewise, at the time of determining the sanction to be imposed in recital 32 of the Sanction Resolution, consideration was given to the application of the “Criteria Applicable to the Administrative Sanctioning Procedure for Non-Compliance with the Rules regulating the Submission of Periodic or Eventual Information”, approved by SMV Resolution No. 006-2012-SMV/01 (hereinafter the “Sanction Criteria”), in force at the time the events occurred4, as well as the

[4] It is important to note that the Sanction Criteria, as indicated in numeral 1 thereof, are applicable to non-compliances in the timely submission of periodic or eventual information that are classified as minor infractions in the Sanctions Regulation. In that sense, it must be taken into account that although the Sanction Resolution considered the application of said Sanction Criteria, since the commission of two infractions of a minor nature was imputed, finally said infractions were subsumed by the sanction corresponding to the infractions of a serious nature. Likewise, it should be noted that the Sanction Criteria have been replaced as of 01 January 2024, by the “Regime of Graduality of Sanctions for late presentation of financial information, annual report and material events”, approved by SMV Resolution No. 007-2023-SMV/01, which according to its article 1 are also applicable to infractions of a minor nature.

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criteria for the graduation of the sanction established in numeral 3) of article 248 of the TUO LPAG.

That, in that sense, although as RBC points out, the Sanction Resolution does not recognize the existence of a quantifiable economic damage, it does indicate the existence of a negative repercussion in the market, “(…) since the financial information corresponding to the 2019 fiscal year was not disseminated in a timely manner, and to date the financial information corresponding to the 2021 fiscal year has still not been disseminated, that is, it is omitted from presentation, thus affecting the transparency of the market.” It should be added that to date, RBC has still not complied with submitting its Audited Annual Individual Financial Information and its Annual Report for the 2021 fiscal year;

That, it is also important to take into account, regarding the seriousness of the damage to the public interest and/or protected legal interest, that the infractions incurred by RBC cause serious damage to the transparency of the securities market, since with the timely presentation of periodic or eventual information by issuers with securities registered in the Public Registry of the Securities Market – RPMV, the aim is to guarantee that all participants in the securities market make their investment decisions adequately informed. In that sense, infractions of this type considerably damage the confidence of investors that they will have the financial information and annual report of the issuers within the deadlines established by the regulations, for the better making of their investment decisions;

That, on the other hand, although the Sanction Resolution recognizes that there are not enough elements to determine the existence of an illegal benefit obtained by RBC for the commission of the infractions nor the intentionality in the commission thereof, it is appreciated that the administered party has various antecedents of sanction, which are detailed below5:

a. Resolution of the Deputy Superintendence SMV No. 038-2017-SMV/11 of 14 June 2017, which sanctioned the issuer with a fine of 9.5 UIT; for having incurred in infractions of a minor nature typified in subsection 3.1 of numeral 3 of Annex I of the Sanctions Regulation;

b. Resolution of the Deputy Superintendence SMV No. 039-2017-SMV/11 of 14 June 2017, which sanctioned the issuer with a fine of 12 UIT; for having incurred in an infraction of a very serious nature typified in numeral 1.1 of literal B) of Annex XV of the Sanctions Regulation;

[5] In recital 42 of the Sanction Resolution it is further stated that RBC presents recidivism regarding the infraction of a minor nature referred to the late presentation of financial information, since by Resolution of the Deputy Superintendence SMV No. 088-2019-SMV/11 of 05 August 2019, RBC was sanctioned with a warning for having incurred in the infraction of a minor nature typified in subsection 3.1 of numeral 3 of Annex I of the Sanctions Regulation. However, it must be taken into account that the sanction corresponding to the two infractions of a minor nature subject of this procedure, were subsumed by the sanction corresponding to the two infractions of a serious nature.

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c. Resolution of the Deputy Superintendence SMV No. 093-2017-SMV/11 of 23 October 2017, which sanctioned the issuer with a fine of 77 UIT; for having incurred serious infractions typified in subsection 2.14 of numeral 2 of Annex I of the Sanctions Regulation and in a very serious infraction typified in subsection 1.4 of numeral 1 of Annex I of the Sanctions Regulation;

d. Resolution of the Deputy Superintendence SMV No. 153-2018-SMV/11 of 05 September 2018, which sanctioned the issuer with a fine of 1.75 UIT; for having incurred a minor infraction typified in subsection 3.1 of numeral 3 of Annex I of the Sanctions Regulation;

e. Resolution of the Deputy Superintendence SMV No. 192-2018-SMV/11 of 21 November 2018, which sanctioned the issuer with a warning; for having incurred a minor infraction typified in subsection 3.1 of numeral 3 of Annex I of the Sanctions Regulation;

f. Resolution of the Deputy Superintendence SMV No. 011-2020-SMV/11 of 23 January 2020, which sanctioned the issuer with a fine of 10 UIT; for having incurred a serious infraction typified in subsection 2.12 of numeral 2 of Annex I of the Sanctions Regulation; and,

g. Resolution of the Deputy Superintendence SMV No. 057-2021-SMV/11 of 14 June 2021, which sanctioned the issuer with a fine of 3.68 UIT; for having incurred a minor infraction typified in subsection 3.1 of numeral 3 of Annex I of the Sanctions Regulation.

That, in accordance with the foregoing, this Office considers that the Sanction Resolution has not infringed the principle of reasonableness at the time of determining the sanction to be imposed on RBC, even more so if it is taken into account that to date RBC has not complied with submitting its Annual Audited Individual Financial Information and its Annual Report for the 2021 fiscal year; and,

In accordance with the provisions of numeral 26 of article 12 of the Regulation of Organization and Functions of the SMV, approved by Supreme Decree No. 216-2011-EF;

RESOLVES:

Article 1.- Declare unfounded the appeal filed by Red Bicolor de Comunicaciones S.A.A. - RBC TV S.A.A. against the Resolution of the Deputy Superintendence SMV No. 017-2023-SMV/11.

Article 2.- Consider the administrative route exhausted.

Article 3.- Transcribe this resolution to Red Bicolor de Comunicaciones S.A.A.- RBC TV S.A.A.

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Article 4.- Order the publication of this resolution on the Institutional Page of the Superintendence of the Securities Market on the Single Digital Platform of the Peruvian State (www.gob.pe/smv).

Register, communicate and publish.

Zósimo Juan Pichihua Serna
Superintendent of the Securities Market

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