Finland's Financial Supervisory Authority ordered Afarak Group Oyj COO and shareholder Danko Koncar to launch a takeover bid of at least €2.50 per share for the company's shares or pay a €40 million fine.

The fine will increase by €10 million each month the takeover bid is not launched, according to the Feb. 22 decision. The amount of the conditional fine was set equal to the total minimum bid consideration.

Koncar is required to publish a mandatory bid within a month of being served with the decision, and the bid procedure must be launched within a month of publication of the bid.

A group of shareholders petitioned the Finnish market regulator in September 2017 to force Danko Koncar and Kermas Resources Ltd. to launch a mandatory takeover bid for Afarak at a minimum of €2.50 per share.

Danko Koncar founded Kermas Ltd. in 1989 and is the general director.

The regulator determined that Koncar and entities he controls acted jointly with Hino Resources Co. Ltd., Finaline Business Ltd. and his spouse Jelena Manojlovic in order to exercise control in Afarak, without notifying investors. The parties held combined voting rights of about 41.56% in Afarak.

"The voting rights of the persons acting in concert have exceeded the bid obligation threshold continuously at least as of 22 October 2009," the decision read.

Koncar has the right to appeal the decision to the Helsinki administrative court within 30 days of being served. Kermas Resources has decided to appeal the decision.

Afarak said Feb. 22 that it is not a party to the matter and "will not comment on the decision by the FIN-FSA."