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14-076MR ASIC obtains orders cancelling 15 million shares held in Northwest Resources Limited
Following an application by ASIC, the Federal Court of Australia has ordered the cancellation of 15 million shares in ASX-listed Northwest Resources Limited (Northwest) that were held in the name of Craigside Company Limited (Craigside), a company incorporated in the British Virgin Islands and operating from Hong Kong.
ASIC had alleged that although Craigside was the holder of the shares (which represented 7.08% of Northwest’s issued capital), it did not have a relevant interest in them. ASIC also alleged that those who did have a relevant interest in the shares had not disclosed their interest to Northwest, contrary to legislative requirements.
The orders, which were made with Northwest’s consent and not opposed by Craigside followed ASIC and Northwest submitting to the court a joint statement of agreed facts. In making the orders, the court did not make any declaration as to who did hold a relevant interest in the shares held by Craigside. Neither ASIC nor Northwest sought such declarations.
ASIC’s action was taken as part of its continuing focus on maintaining fair and efficient financial markets.
ASIC Commissioner John Price said, ‘The requirement for substantial shareholders to disclose their relevant interests in listed companies is essential to ensuring that investors are informed about the identity and dealings of people who may have influence over the affairs of the companies they are investing in. This underpins confident and informed participation by investors in the Australian financial system.’
ASIC’s investigation into various matters associated with Craigside’s shareholding in Northwest, including possible contraventions of the law, is continuing.
Northwest is an Australian mining company listed on the Australian Securities Exchange.
In December 2011, ASIC obtained interim orders from the Federal Court restraining Craigside from disposing of the 15 million shares that it held in Northwest or exercising any votes or other rights attached to them. Those orders also restrained Northwest from registering any dealings in Craigside’s shareholding and required Northwest to cause its share registrars to apply and maintain a holding lock over the shareholding in order to prevent any dealings in the shares (refer: 11-303AD).
At the time the interim orders were obtained by ASIC, the Craigside shareholding represented 11.46% of Northwest’s issued capital. As a result of share issues made by Northwest since the interim orders were made, the shareholding cancelled by the court represented 7.08% of issued capital.
The proceedings were commenced under section 1325A of the Corporations Act 2001 which enables the court to make any orders it considers appropriate if a person states in response to a notice issued by ASIC they do not have particular information about the shares or about persons who have a relevant interest.