ASIC media releases are point-in-time statements. Please note the date of issue and use the internal search function on the site to check for other media releases on the same or related matters.
16-319MR Sydney Stock Exchange-listed company pays penalty for alleged continuous disclosure breach
Sanhe Building Materials Technology Company Limited (Sanhe), a company listed on the Sydney Stock Exchange (formerly Asia Pacific Stock Exchange), has paid a penalty of $33,000 after ASIC served an infringement notice on the company for allegedly failing to comply with its continuous disclosure obligations.
ASIC issued the infringement notice as it considered it has reasonable grounds to believe Sanhe breached its continuous disclosure obligations by failing to inform the Sydney Stock Exchange that it was likely that its operating financial result for the full year to 31 December 2015 would be materially lower than the operating result of the previous corresponding period.
'All companies looking to list on Australian markets must be aware of and comply with their disclosure obligations', ASIC Commissioner Cathie Armour said.
The Sanhe corporate group specialises in the manufacture, sales and transportation of ready-mixed concrete. Sanhe is a non-operating Australian holding company that has subsidiaries located in Hong Kong and mainland China.
Sanhe was admitted to the official list of the Sydney Stock Exchange on 6 October 2015 and official quotation of Sanhe's securities commenced on 9 October 2015.
On 3 February 2016, Sanhe released its '2015 Full Year Market Update' on SSX for the full year to 31 December 2015 where it announced sales revenue had declined 34% and net profit after tax had declined 67% compared to the previous year.
Following enquiries, ASIC issued an infringement notice that alleged:
- on 6 October 2015, Sanhe disclosed a total loss of $1,064,974 for the half year ended 30 June 2015 and stated that the half year loss was attributable to the Spring holiday and the rainy season in China
- Sanhe's internal monthly accounts for July, August and September 2015 show that Sanhe made losses for each of these months
- it would have been reasonable to expect that Sanhe was aware of its monthly results for July, August and September 2015 by 6 October 2015 and that its operations had made large losses between January and September 2015
- by 6 October 2015 Sanhe was aware that it was likely that its operating financial result for the full year period 1 January 2015 to 31 December 2015 would be materially lower than the operating result of the previous corresponding period.
The company has complied with the infringement notice and paid the penalty.
The Corporations Act provides that compliance with infringement notices is not an admission of guilt or liability.
Sanhe is not, by reason of its compliance with the notice, regarded as having contravened section 674(2) of the Corporations Act.
Details of the infringement notice will be published in the ASIC Gazette.