ASIC has acted to stop unsolicited off-market offers by Torchwood Holdings following concerns that the offers contravened the law.

Approximately 3,500 offers were made by Ms Helen Rose, under the trading name ‘Torchwood Holdings’, on 15 August 2007 to purchase stapled securities in Centro Properties Limited and Centro Properties Trust (Centro).

On 22 August 2007, ASIC issued an interim stop order preventing Torchwood Holdings from transferring any securities it obtained under the offers, after being alerted by Centro. A final stop order was issued on 5 September 2007.

ASIC was concerned that the offers did not comply with the requirement that they contain a statement to the effect that Torchwood Holdings could withdraw its offer by sending a withdrawal document to the offeree, after one month of the date of the offer.

Centro alerted ASIC to the defective offers and worked pro-actively to assist security-holders who accepted an offer. Centro published a pro forma letter on its website for security-holders to require the return of their securities.

‘Centro’s actions are commendable, and we welcome Centro’s collaborative approach and the steps it took to assist security holders’, Ms Jennifer O’Donnell, ASIC’s Executive Director of Compliance said.

This stop order follows earlier action by ASIC to stop defective unsolicited share offers made by Share Buyback Group Pty Ltd and Mardel Services Pty Ltd as trustee for M&M Investments Superannuation Fund.

More information about unsolicited offers is available from ASIC’s consumer website, FIDO, at www.fido.gov.au.

Background

The market value of a Centro security, as at 15 August 2007, was $7.51 and the offer price from Torchwood Holdings was $6.51 per security.

Off-market offers to purchase financial products are regulated under Division 5A of Part 7.9 of Chapter 7 of the Corporations Act.

Under Division 6, ASIC may make a stop order prohibiting specified conduct in respect of a financial product if an offer to purchase that financial product is defective or if it is not worded and presented in a clear, concise and effective manner.

An offer may be defective if it contains a misleading or deceptive statement or there is an omission of required content, such as the market value of the financial product as at the date of the offer.

Before making a final stop order, ASIC is required to give procedural fairness to the offeror.