LPP statement

With reference to the previous statements of the company, we would like to inform that a report of suspected criminal offence to the detriment of LPP SA and its shareholders, stock exchange investors, posing threat to the safety of the financial market, has been submitted today to the Prosecutor’s Office. The report is substantiated by false or manipulated information published today in the material issued by Hindenburg Research.

The company furthermore provides preliminary comments on the information contained in said material.

We strongly deny the information contained in the Hindenburg Research material. In particular, we inform that:

1. LPP SA does not conduct commercial activity on the territory of the Russian Federation;
2. the sale transaction pertaining to the Russian company was not fictitious and did not involve bookkeeping or accounting manipulation;
3. as of 2022, LPP SA does not control the Russian company OOO Re Trading and its operations;
4. entities operating under the names Fashion Group Textile and Asia Fashion Import Export are not controlled by LPP SA in any way;
5. the entity operating under the name Far East Services is not controlled by LPP SA in any way;
6. the Management Board of LPP SA did not finance, in any way, the sale of shares or the operation of the business in Russia following its sale, including through loans secured by pledges on LPP SA shares;
7. the company did not make shipments of goods to Russia via the territory of Kazakhstan;
8. the company did not change the auditing company carrying out the audits of the financial statements of the Company and its Group because of the transaction of sale of the Russian company or the resulting issues (the change was due to the expiry of the term of the envisaged cooperation with the selected company).

The Company is currently analysing the aforementioned extensive material in detail and will make further references to it in subsequent communications.

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In addition to the LPP statement of 15.03.2024 regarding the Hindenburg Research report, we would like to inform that:

• LPP does not own the Russian business. In May 2022, the company signed an agreement to sell 100% of its shares in RE TRADING OOO, which was confirmed and made final by a Russian court decision.
• The company does not trade in the Russian Federation.
• LPP does not, directly or indirectly, control the current owners and directors of the company that purchased RE TRADING OOO. The buyer is an independent company with no capital or personal relations to LPP.
• Since the conclusion of the agreement for the sale of the shares in RE TRADING OOO, the company has reported in the Financial Reports available on the company’s website https://www.lpp.com/en/investor-relations/reports/financial-reports/ that, as part of the sale agreement, the parties have provided for a transitional period of the transaction in which the buyer successively assumes complete autonomy over the individual business areas of the company. This period was set to apply up to 2026 at the latest.
• The company is analysing the material published by Hindenburg Research in detail. Due to its volume, the company needs time to address the statements contained therein in a substantive manner. However, even a cursory reading of the material allows to say that it contains false information about LPP’s operations.
• The company emphatically confirms that it does not conduct business activity in Russia.
• For several months, LPP has been monitoring the situation related to the attack targeted at the company, aimed at manipulating the share price. From the information obtained, it is clear that the attack is inspired by persons whose aim is to profit from the loss of value of LPP shares.
• The modus operandi involving a media attack and simultaneously taking short positions on LPP shares is similar to the one applied a few years ago in relation to the international conglomerate Adani Group, involving the same entities.
• LPP is a company that constitutes a pillar of the Polish financial market and prides itself on being one of the largest employers and tax payers in Poland.

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The report prepared by Hindenburg Research is part of an organised disinformation attack prepared for five months, seeking to decrease the share price of LPP Group. We had previously informed the Ministry of Foreign Affairs and the head of the National Revenue Administration about the case. We have managed to establish that we are not the first company to have become an object of interest for the intelligence agency. Earlier, Adani was targeted by Hindenburg in a similar manner. Also, we are certain that the intelligence agency acts on behalf of third parties. It cannot be ruled out that this type of action may be an attempt to gain influence at LPP.

The Group is in full control of the situation. We will be sharing regular updates.

Source: LPP Press Office

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LPP is a Polish family company, one of the most rapidly growing in the fashion industry in the Central European region. For 30 years, it has been operating successfully in Poland and abroad, based on a network of 2000 stores located in nearly 30 countries, including such prestigious capitals as London, Helsinki, and Tel Aviv. The group’s total commercial space is about 1.9 mln m2. The company manages 5 clothing brands: Reserved, Cropp, House, Mohito, and Sinsay, which is also available today through the online channel. LPP plays an important role in creating jobs for nearly 30,000 people in offices and sales structures in Poland, Europe, Asia, and Africa. The company is listed on the Warsaw Stock Exchange in the WIG20 index and belongs to the prestigious MSCI Poland Index.