KTM Selling MV Agusta Shares, Under Investigation by Financial Market Authority

It's unclear exactly how related the investigation is to the selling of shares.

Photo by: Motorsport Images

By: Robbie Bacon

Dec 24, 2024 at 7:37am ET

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The actions surrounding KTM's financial crises have been so shady, like when a C-suite executive told journalists there was no credence to YouTube videos claiming the brand was in financial trouble, knowing full well that it was. But there wasn't any talk of the manufacturer doing anything illegal.

Until now.

KTM has a 50.1 percent majority stake in MV Agusta, but it looks like that's about to change. There was already speculation surrounding whether Pierer Mobility Group (PMG) would sell its controlling stake in MV, which it acquired in 2022, and recently, a regional court in Ried im Innkreis in Upper Austria heard that an administrator would proceed with the sale.

Selling off shares should be in PMG's best interest, and it would be in practically any brand with $3 billion in debt. There are rumors that the former owner of MV Agusta, Timur Sardarov, might be interested in buying back his shares and regaining control of MV.

But amidst all this, things look to be going from bad to worse for KTM.

According to a report by the Oberosterreichische Nachrichten, the Financial Market Authority (FMA) in Austria has launched an investigation into KTM's operations. Specifically, the probe intends to determine whether PMG complied with disclosure regulations. Public companies, like PMG, must publish insider information immediately so that it is available to all market participants simultaneously. So why would this be a problem?

What do you think?

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Based on a report by the Austrian Press Agency, between May and November, PMG adjusted its forecasts of the business and underwent management restructuring. The number of KTM's board members also dropped from six to two earlier this year. As of now, it's unclear whether there's been any criminal act.

We want to know your thoughts on the horror story that is KTM's financial circumstances. Do you think the company was operating in the shadiest of gray areas, or do you think it veered into illegal activities?