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Wednesday 16 February 2022

22-022MR ASIC prosecutes seven companies for failing to lodge financial reports and hold AGMs

Between 1 July 2021 and 31 December 2021, ASIC prosecuted seven companies for failing to comply with their obligations to lodge financial reports and hold annual general meetings (AGMs) in the required timeframes.

ASIC took action against the following companies:

  • Truck Whisperer Ltd (ACN 100 430 608), which was convicted and fined $4,000 for failing to lodge four annual financial reports between 2016 and 2019 (inclusive),
  • European Cannabis Corporation Limited (ACN 112 291 960), which was convicted and fined $6,000 for failing to lodge two annual financial reports between 2020 and 2021 and $4,000 failing to hold two AGMs between 2020 and 2021,
  • Appsolute Digital Limited (ACN 600 493 178), which was convicted and fined $20,000 for failing to lodge six annual financial reports between 2015 and 2020 (inclusive),
  • Odin Energy Limited (ACN 124 491 416), which was convicted and fined $25,000 for failing to lodge 3 annual financial reports and three half yearly reports for 2018, 2019 and 2020,
  • North Queensland Bio-Energy Corporation Limited (ACN 108 877 872), which entered into a 36-month good behaviour bond for failing to lodge three annual financial reports for 2017, 2018 and 2020,
  • Enegra Pty Ltd (Deregistered) (ACN 152 390 611), which was convicted and fined $50,000 for failing to lodge seven annual financial reports between 2013 and 2019 (inclusive) and $20,000 for failing to hold four AGMs between June 2016 and November 2019, and
  • Dongfang Modern Agricultural Holding Group Ltd (ACN 604 659 270), which was convicted and fined $300,000 for failing to lodge one annual and one half yearly report, failing to hold an AGM, report to its members for the 2019 financial year and to have a company secretary and at least 3 directors appointed between June 2019 and July 2021 (see 21-303MR for more information).

Certain types of Australian companies are required by law to lodge financial reports with ASIC within a specified period after the end of their financial year. Some companies also have a legal requirement to lodge financial reports every half year. Public companies must hold AGMs at least once per calendar year within a specified period after the end of its financial year.

Compliance with these requirements is important as accurate and timely financial reports and regular AGMs provide shareholders, creditors and the public with important information, enabling them to make informed decisions when dealing with these companies.

ASIC will continue to prosecute companies that systemically fail to comply with their financial reporting obligations.

Background

Section 292 of the Corporations Act requires all disclosing entities, public companies, large proprietary companies, and registered schemes to prepare financial reports each financial year.

Section 319 of the Corporations Act requires a disclosing entity and registered scheme to lodge the complete financial reports within three months after the end of the financial year. All other entities are required to lodge their financial reports within four months after the end of the financial year.

Section 302 of the Corporations Act requires disclosing entities to prepare financial reports each half-year.

Section 320 of the Corporations Act requires a disclosing entity to prepare or obtain a report for a half-year and lodge the report with ASIC within 75 days after the end of the half-year.

Section 250N of the Corporations Act requires public companies to hold AGMs within 18 months after registration and at least once per calendar year and within 5 months after the end of its financial year.

Editor's note:

A previous version of this media release has stated that North Queensland Bio-Energy Corporation Limited (ACN 108 877 872) received a $40,000 fine. This was incorrect and reference to the fine has been removed.

Last updated: 16/02/2022 02:31