Wednesday, 24 August 2016

Misleading and deceptive conduct by directors - a timely reminder of the repercussions of making a misleading market announcement

A recent prosecution by ASIC against an ASX listed mining exploration company serves as a timely reminder about the repercussions of making misleading market announcements, not only for the company, but also for its directors.

On 19 August 2016, the Federal Court handed down a decision which saw two executive directors of Padbury Mining Limited (Padbury), Gary Stokes and Terence Quinn, being banned from managing corporations for three years and fined $25,000 each for breaching their disclosure obligations as directors.  They were also ordered to pay ASIC’s costs of $200,000.

Friday, 19 August 2016

A case of déjà vu as ASIC continues to request realism and clarity in financial reports

Every six months, ASIC publishes its areas of surveillance on financial reports soon to be lodged by reporting entities.

For 30 June 2016, ASIC has reiterated its focus that financial reports clearly articulate the approach to valuation of assets and accounting policy choices.  This is continuing the theme from ASIC’s review of 31 December 2015 financial reports when ASIC Commissioner, John Price, stated:
The largest number of our findings continue to relate to impairment of non-financial assets and inappropriate accounting treatments. Directors and auditors should continue to focus on values of assets and accounting policy choices.
ASIC’s media release mirrors its requests from previous financial reporting periods, and asks for directors to apply ‘realism and clarity’ to their financial reports.  ASIC is particularly concerned with companies:

Tuesday, 2 August 2016

ASX continues to refine proposed changes to admission requirements

In an earlier post, ASX to take a harder line on early stage IPOs, we highlighted some of the key changes proposed by ASX to the admission requirements for a listing on the exchange.

The ASX consultation process for the proposed amendments closed on 24 June 2016, with the changes initially anticipated to take effect from 1 September 2016.  The transition date has, however, been delayed to 19 December 2016 following extensive industry feedback to ASX.

The level of feedback perhaps reflects a concern that the changes, if adopted, are likely to have a significant impact on small cap IPO candidates and back-door listings.