The Australian Securities and Investments Commission (ASIC) today announced the results of its campaign against listed companies that failed to lodge their financial statements on time.
The project was designed to detect and take action against listed companies which failed to lodge their half-year financial statements on time, or companies which failed to lodge their full-year financial statements on time, where they had a December 31 balance date.
ASIC issued22 orders under s713(6) of the Corporations Act against companies which were late, or failed to lodge their December half-year financial statements. A further five determinations under section 713(6) of the Act were issued against companies which were late, or failed to lodge their December full-year financial statements.
Orders under section 713(6) have two major effects. The first is that they require the companies to use a full prospectus, rather than allowing them the opportunity to rely on the shorter form of prospectus usually available for a listed company that has been complying with its disclosure obligations to the market.
The second is that companies are unable to avail themselves of some ASIC class orders which would otherwise assist in cheaper and quicker fundraising. Examples of these class orders are CO 02/1180, which allows placement of securities in the listed class to be on-sold within 12 months of the placement, and CO 02/831, which allows companies to offer up to $5,000 worth of securities in the listed class to existing members without a prospectus.
ASIC is considering additional enforcement action against those listed companies which have still not lodged their financial statements. The companies have a right of appeal against the orders to the Administrative Appeals Tribunal.
‘It is very disappointing to find that listed companies are still not complying with their disclosure obligations as they apply to their financial statements’, ASIC’s Executive Director Policy and Markets Regulation, Mr Malcolm Rodgers said.
‘ASIC ran this project last year for companies with a 30 June balance date and expected to find that group would have a much better track record in lodging their half-year accounts this time around. We were concerned to find so many of that group had not heard the message. One in fact was detected as being late lodging both the June and December period accounts.
‘The orders ASIC has made reflect our view that investors, when asked to make new investment decisions, cannot rely on these companies disclosure track record.
‘If companies fail to comply with their disclosure obligations under the Corporations Act, ASIC will prevent them from raising monies from the market using the more limited disclosure regimes, and instead, require them to provide investors with a full prospectus’, Mr Rodgers said.
End of release