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Dear media representatives,

Gradus AD has submitted a letter of complaint before the Financial Supervision Commission in regards to widespread false and misleading circumstances about the company – made by Svetoslav Ilchovski – during his hearing on 5 and 7 May 2021 at the Interim Committee for Inspection to establish/confirm abuses and violations in the spending of funds by the Council of Ministers, Ministries, State bodies, State enterprises and companies with more than 50 percent of state participation in the last 10 years.

These circumstances suggest false or misleading indications regarding the price of the Gradus AD shares traded on the Bulgarian Stock Exchange market and determine this price at an unusual and artificial level.

The company referred a request to the Financial Supervision Commission for conducting a comprehensive audit of whether or not these actions constitute manipulation of the market of the Gradus AD shares.

The complaint sent to the regulator is accompanied by all the financial and accounting information (as opposed to partially and selectively provided information by Mr. Ilchovski), including invoices, handover protocols and other documents clearly proving any allegations of “fictitious/fake turnovers” are groundless and ill-intended.

The regulator should check whether or not there have been violations of the Market Abuse Regulation and the Law on the Implementation of Measures against Market Abuse of Financial Instruments (the Law on Measures against Market Abuse).

The position of Gradus AD is the following:

• The circulated circumstances are incorrect and misleading and give false and misleading indications regarding the Gradus AD share price;
• The turnover of Gradus-3 AD is not decisive for the price the Gradus AD shares were sold at in the IPO. The brochure itself clearly shows the three ways of valuing a share, and none of them takes into account the traded volumes, and thus it makes the accusations of "hollow/fake turnovers" and "false transactions" pointless. The transactions Mr. Ilchovski claims to be fictitious are negligibly small compared to the company's total turnover for the reference period mentioned;
• The brochure discloses complete and reliable information about the financial condition of Gradus 3 AD and the risks related to its activity;
• The circulation of false circumstances for the Gradus group has had a negative impact on the market capitalization of Gradus AD and has directly affected mainly the small shareholders;

We request for conducting a comprehensive audit of the notification of violation, as the FSC is invited to exercise its supervisory powers pursuant to Art. 18 of the Law on the Financial Supervision Commission and Art. 28e (2) supra Art. 25 (2) to (5) of the Rules for the structure and activity of the Financial Supervision Commission and its administration – in order to establish whether or not the described actions of Svetoslav Ilchovski constitute manipulation of the market stock of the Gradus AD shares within the meaning of the Regulation on market abuse.

Upon establishing an administrative violation, the Commission may impose the provisions of Art. 23 of the Law on Administrative Offenses – namely administrative penalties in the amount of up to BGN 5 million.

Gradus AD will assist the FSC in performing the audit with any additional information and full access to the accounting and legal database of the company.

As a public company, we at Gradus AD believe in the supremacy of law and transparency, and we want the facts to be clarified quickly and the truth to be made public. Justice and the good name of our company, as well as the overall image of the domestic capital market are all at stake here.

Please find attached a document containing the full text of the complaint to the Financial Supervision Commission. All documents are available on the company's website as well: https://www.gradus.bg/novini-za-investitorite

For more information click here.

GRADUS AD