ASIC has issued two interim stop orders on the public offer (Offer) of redeemable preference shares (Company Securities) by Green Planet Recycling Solutions Limited, an unlisted public company.

The orders were made in relation to:

• the offer of Company Securities under the prospectus lodged with ASIC on 29 January 2025 (Prospectus) to raise up to $20,000,000; and
• the failure to prepare a target market determination (TMD) in compliance with design and distribution obligations (DDOs) in connection with the Offer.

The interim stop orders prevent Green Planet Recycling Solutions from:

• offering or issuing Company Securities under the Prospectus; and
• dealing with Company Securities, giving a prospectus or providing financial advice to retail clients.

The orders are valid for 21 days unless revoked earlier.

Prospectus interim stop order

ASIC was concerned that the Prospectus did not adequately disclose all of the information required under section 710 of the Corporations Act 2001 (Corporations Act), including, but not limited to, the Company’s:

• historical financial information;
• business model;
• proposed use of funds to be raised;
• rights and liabilities attached to Company Securities;
• capacity to pay dividends; and
• Offer risks.

ASIC was further concerned that the Prospectus:

• included misleading statements regarding issues of sustainability and the Company’s operating status; and
• did not present information in a clear, concise and effective manner.

DDO interim stop order

ASIC was further concerned that Green Planet Recycling Solutions had contravened its DDO in Part 7.8A of the Corporations Act, as it had not prepared a TMD in relation to the Offer.

Background

Where ASIC has concerns that a prospectus does not meet relevant disclosure requirements under the Corporations Act, it may issue an interim stop order that no offer or issue of securities be made while the order is in force. Where ASIC’s concerns are promptly satisfied, ASIC may revoke the interim stop order to allow the offer to proceed.

DDO requires firms to design financial products that meet the needs of consumers, and to distribute those products in a targeted manner. ASIC reminds issuers that a TMD is an important requirement under DDO. It is a mandatory public document that sets out the class of consumers a financial product is likely to be appropriate for (target market) and matters relevant to the product’s distribution and review.

Ensuring compliance with the design and distribution obligations is a key focus for ASIC. We will continue to take regulatory action where warranted and use the design and distribution obligations to improve consumer outcomes.