TIE Kinetix: Update On Reclaim EU Development Grants

TIE Kinetix N.V. ("TIE Kinetix") announces that is has received further letters from the European Commission and invoices for a total amount of € 705k. 

Breukelen, The Netherlands

TIE Kinetix participated and is still participating in various EU projects. To verify the appropriateness of EU grants given, the European Commission is entitled to perform audits. In December 2013, an audit was carried out on three projects in the period 2008-2011.
 
On October 28, 2014 TIE Kinetix received a notice from the European Commission for a partial repayment of development grants, following the 2013 audit. Even though projects were audited by TIE Kinetix’s previous audit firm EY and had been executed to full satisfaction and even though financial management was, according to the auditor, carried out in an acceptable manner, some of the procedures were not in compliance with the requirements of the EC. Although the EC commissioned audit was limited to three projects in the period 2008-2011, TIE Kinetix is required to extrapolate the audit findings to all twelve projects for which it has received development grants under the same regime.
 
As of October 28, 2014 TIE Kinetix management has taken various actions to mitigate damages:

  • The financial framework on which EU claims for development grants are calculated, has been  completely rebuilt;
  • All projects costs for the period 2008 – 2014 have been completely recalculated.
  • The European Commission has been contacted at various stages to propose ways to remedy the financial anomalies from the past. Such remedies would require the co-operation of the European Commission;
  • TIE Kinetix’s previous audit firm EY has been involved in the preparation of all communication with the Commission;
  • A new (Big Four) audit firm has been hired to supervise all administrative procedures and calculations applied in current and future EU projects;
  • EY was held liable for damages and we are involving legal counseling and will seek further advice on initiating legal action against EY;
  • An agreement has been reached with an undisclosed party to act as guarantor up to an amount of €2 million for funding of damages.

On February 3rd, 2015 TIE Kinetix received a notice from the European Commission, in which all remedies proposed by TIE Kinetix and EY are denied on formal grounds. In their notice the Commission is requesting payment of € 705k by March 20, 2015.
 
In a reaction on February 4th, 2015 TIE Kinetix has announced to withdraw from Pro Deo Board Memberships at European Technology Platform Nessi, from Pro Deo Board Memberships at Big Data Value Association and has indicated that TIE Kinetix will bring down significantly its involvement in current and future EC projects.
 
TIE Kinetix is now requesting a meeting with the European Commission to discuss a payment plan and is preparing legal action against EY. TIE Kinetix will also seek advice to initiate legal action against the European Commission.
 
By February 27, 2015 TIE Kinetix is required to submit recalculations for all other projects under the same regime from 2008 onwards. At this stage it cannot be excluded that this will subsequently lead to further reclaims of EU Development Grants.
 
For questions about this press release, please contact Jan Sundelin (CEO) or Michiel Wolfswinkel (CFO) viaInvestor.Relations@TIEKinetix.com

About TIE Kinetix 
TIE Kinetix transforms the digital supply chain by providing Total Integrated E-commerce solutions. These solutions maximize revenue opportunities by minimizing the energy required to market, sell, deliver and optimize online. Customers and partners of TIE Kinetix constantly benefit from innovative, field-tested, state-of-the-art technologies, backed by over 25 years of experience and prestigious awards. TIE Kinetix makes technology to perform, such that customers and partners can focus on their core business.

Breukelen, The Netherlands

TIE Kinetix is a public company (Euronext Amsterdam: TIE), and has offices in the United States, the Netherlands, France, Australia, UK, Spain, Germany, Austria and Switzerland.
 
For more information, please contact:
 
TIE Kinetix N.V.
Jan Sundelin (CEO) or Michiel Wolfswinkel (CFO)                                  
De Corridor 5d
3621 ZA Breukelen
The Netherlands
 
T:         +31-88-369-8000
E:         Investor.Relations@TIEKinetix.com
W:        www.TIEKinetix.com
 
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Submitted by Investor Relations on Fri, 02/06/2015

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