Watchdog’s release fails prospectus test

Illustration: Peter Nicholson

IT’S a good thing press releases issued by the corporate regulator don’t have to go through the same vetting processes it imposes on people trying to raise money from investors.

Because if the petulantly passive-aggressive statement Greg Medcraft’s madcap crew put out on Friday was a prospectus, ASIC would have been compelled to permanently stop it on the grounds it was misleading and deceptive.

The statement slammed as “inaccurate and speculative” media articles on Friday about a $110 million mortgage scam, run out of suburban Melbourne, over which ASIC has charged three people.

Of course, ASIC didn’t deign to identify any specific inaccuracies or speculations in the articles, which ran in The Australian and in Fairfax’s metropolitan papers.

Margin Call, who had a hand in this newspaper’s coverage, asked ASIC what was inaccurate. There’s been no response.

Even so, it’s pretty clear what ASIC is upset about: perfectly accurate reporting that one of the targets of its investigation, Mohamed Radhi Maki Ebrahim Ahemed, left the country two days after Federal Police raided his property and found evidence of forged pay slips, allegedly used to get bank loans. We know this because a police officer swore to it in an affidavit filed in a Victorian County Court proceeds of crime case back in 2012.

ASIC’s statement also made a song and dance about it being inadvisable to tell people’s bosses that they’re under investigation. Well, duh. And that wasn’t the issue raised: instead, the point made in both The Australian and Fairfax papers was that suspect Aizaz Hassan was allowed to keep on working as a mortgage broker during the four-year investigation … right up until last Tuesday, when reporters rang his boss and broke the news that he had been charged.

The regulator’s broadside also omits to mention the curious case of the suppression order that didn’t bark.

ASIC told reporters there was a suppression order on Thursday afternoon — late enough in the day that Fairfax had to hold its story over. The regulator didn’t produce the order until The Australian’s lawyers got involved. And when they finally did, it turned out not to have anything to do with reporting the County Court material.

Margin Call wonders how ASIC would feel about a prospectus issuer that tried similar antics.

Rules of the game

STILL on prospectuses: has ASIC changed the way it vets them without telling anyone?

It has, says John Karantzis, the biggest shareholder in tech company iSignthis, which had its backdoor listing into the shell of Otis Energy stopped by the regulator on Friday.

Not so, says ASIC: the rules are the same as ever.

Karantzis reckons the questions ASIC have asked about the deal, which aims to raise just over $3m, will be easy to answer and would formerly have been dealt with through an exchange of letters and the issue of a supplementary prospectus.

He said ASIC moved to issuing interim stop orders as a matter of “routine” in December.

The regulator wants a bit more info about iSignthis’s patent portfolio and the skinny on a company associated with former Otis director Winton Willesee that is buying the company’s existing US business for about $41,000.

In return for about two thirds of Otis, British Virgin Islands-registered iSignthis will hand over its two subsidiaries, ISX IP (also of the BVI) and iSignthis BV (of The Netherlands).

Smith tour expands

SOUTH America, Hong Kong and now India: it’s around the world in (less than) 40 jobs for ANZ boss and international man of mystery Mike Smith, who’s signed up to the Australia-India CEO forum, which meets later this year.

Trade Minister Andrew Robb says others joining the jet-setting banker for the “revitalised” subcontinental shenanigans include Peter Coleman (Woodside), Dean Dalla Valle (BHP Billiton Coal), Gary Helou (Devondale Murray Goulburn), Brian Kruger (Toll), David Thodey (Telstra) and Anthony Pratt (Visy). Rio Tinto’s Sam Walsh is co-chairman.

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