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In the last two years, Solon Eiendom has sold apartments worth NOK 516 million to Solon Realkapital.
Solon Eiendom owns 49 percent of Solon Realkapital, while a board member of the publicly-traded real estate company, Runar Vatne, owns 51 percent through Vatne Property.
Total sales are not reported in either quarterly or annual reports until the first quarter of 2020. At that time, Solon Eiendom indicated this in the note for related party transactions, which occurred after DN asked questions about the transaction between the Business.
In previous reports, the company has explicitly written that there have been no related transactions.
Point out the missing note information
In a statement Thursday, Finanstilsynet writes that it has reviewed certain matters in the financial reports to Solon Eiendom. The control has mainly included information about the investment in Solon Realkapital in the annual report and annual accounts for 2019.
«In the valuation of Finanstilsynet, the annual report should analyze the figures recorded to a greater extent and a more precise mention must be made of the purchase and sale contracts concluded with Solon Realkapital. Finanstilsynet has further noted that the annual report must contain a sufficient description of the most central risks and uncertainties associated with transactions with Solon Realkapital, see Accounting Law § 3-3a ”, the report states.
Finanstilsynet believes that the annual accounts do not contain sufficient information on the principles used to recognize and measure the investment in Solon Realkapital.
“From the analysis of the annual accounts, it is not clear that the investment is considered a joint venture that is accounted for using the equity method. Furthermore, Finanstilsynet has pointed out the lack of information in notes on transactions with Solon Realkapital as a related party, ”the Authority writes.
– Our reports and accounts are in accordance with the requirements that apply, and we will respond to Finanstilsynet’s inquiry when it arrives, former Solon CEO Stig L Bech told DN in June.
Bech left Solon in September and was replaced by Andreas Martinussen, who had previously been the home developer’s CEO.
The case is considered closed
The audit has also verified other matters and:
- Ask the company to provide more detailed reconciliation elements between the segment information and the company accounts.
- The Authority has questioned the lack of division of operating income in the category “geography” and assumes that the company will make a new assessment in 2020 that takes into account that the company has expanded its operations to various geographic areas this year.
- The Authority has also indicated a lack of information related to the transaction price divided into the remaining delivery obligations and a lack of information related to the costs of the contract.
DN has been in contact with Solon’s CEO Andreas Martinussen, who is referring to CFO Scott Danielsen. The case will be updated with comments from the company.
The Finanstilsynet report states that Solon has taken note of the Authority’s assessment and that the case is considered closed.(Terms)Copyright Dagens Næringsliv AS and / or our suppliers. We would like you to share our cases via a link, which leads directly to our pages. Copying or other use of all or part of the content may only be made with written permission or as permitted by law. For more terms, see here.
