On 4 March 2020, Mr Mark Damion Kawecki, of Frankston Victoria, appeared at the Melbourne Magistrates鈥� Court and pleaded guilty to two counts of dishonest conduct in relation to attempts to satisfy the minimum spread requirement for companies seeking to be admitted to the ASX. This is the first prosecution of its kind.
Under the ASX Listing Rules, a company must meet the 鈥榤inimum spread requirement鈥� (a minimum number of unrelated shareholders in the company) before its shares can be quoted and traded on the ASX.聽 This serves to ensure some level of liquidity at the time the company is initially listed and to keep poorer quality applicants, that are not able to attract sufficient investor interest, from being admitted to the ASX official list. ob体育 considers attempts to satisfy the minimum spread requirement through artificial means as serious misconduct which interferes with the integrity of our markets.聽
Mr Kawecki pled guilty to two counts of dishonest conduct contrary to s1041G of the Corporations Act 2001 (Cth), namely:
- Engaging in dishonest聽conduct in relation to the submission of applications for shares聽containing false information about the applicant鈥檚 address to the share registry for three entities seeking admission to the聽ASX official list between about 19 January 2015 and 23 December聽2016; and
- Engaging in dishonest聽conduct in relation to the submission of applications for shares and a聽table of applications for shares containing false or misleading聽information about the beneficial holder of shares to the share registry for a company seeking admission to the ASX official list and to a聽stockbroker assisting an entity鈥檚 re-admission onto the ASX official list聽between about 23 January 2015 and 9 July 2015.
Each offence carries a maximum penalty of ten years鈥� imprisonment or a fine of up to 4,500 penalty units or both.
ob体育鈥檚 investigation into Mr Kawecki鈥檚 conduct related to the provision of false or misleading information contained within applications to participate in public offerings by four entities seeking to be admitted (or re-admitted) to the ASX official list.聽
Mr Kawecki has been committed to the Melbourne County Court on the charges.聽The next hearing date has been set down for 18 August 2020.
Background
In addition to Mr Kawecki鈥檚 guilty plea, as a result of ob体育鈥檚 investigation into suspected contraventions of the ASX Listing Rules into the minimum spread requirement:
- in聽June 2018, ob体育 banned Mr Kawecki from providing financial services for a聽period of seven years following an ob体育 investigation into the conduct (18-185MR)
- in October 2018, a Sydney authorised representative was 聽聽聽聽 prohibited from providing financial services for a period of five years聽under the terms of a court-enforceable undertaking (18-319MR).
ob体育 reminds market participants of their obligations when acting on behalf of companies seeking admission to the official list of ASX Limited, pursuant to both the ASX Listing Rules and the Corporations Act 2001.
Editor's note:
The hearing scheduled for 18 August 2020 has been adjourned to 10:30am on 1 October 2020.
Editor's note 2:
On 1 October 2020,聽the sentencing hearing was heard and a decision is to be delivered on 29 October 2020.