ob体育 has restricted Smiles Inclusive Limited (Smiles) from eligibility to issue a reduced-content prospectus until 19 October 2021.
The decision means Smiles will not be able to rely on reduced-disclosure rules and instead must issue a full prospectus if it wishes to raise funds from retail investors.
ob体育's decision was based on Smiles鈥� failure to lodge a financial report, directors鈥� report and auditor鈥檚 report for the half-year of the company, ended 31 December 2019, within 75 days, as required under the Corporations Act 2001.
ob体育 considers the ability to use a reduced-disclosure prospectus a privilege, dependent on compliance with other aspects of the law, including that companies meet their on-going disclosure obligations.
Where a company fails to comply with its periodic disclosure obligations in a full, accurate and timely manner, ob体育 will intervene to ensure that retail investors are protected. In such circumstances, subsequent fundraisings should occur only with the benefit of a full prospectus so that there is adequate disclosure of a company鈥檚 prospects and financial position.
Smiles has the right to appeal to the Administrative Appeals Tribunal for review of ob体育's decision.
Background
A listed company is allowed to offer securities using a reduced-content prospectus containing information relating only to the particular offer itself.
ob体育 has the power to prevent a company from relying on these rules if the company breaches its continuous disclosure or financial reporting obligations.
Smiles鈥� half-year financial report, directors鈥� report and auditor鈥檚 report were required to be lodged with ob体育 by 15 March 2020.
On this basis ob体育 made a determination under section 713(6) of the Corporations Act 2001, excluding Smiles from relying on section 713 of the Act for 12 months, until 19 October 2021.
Smiles鈥� securities are currently suspended from being traded on the Australian Securities Exchange.