At a recent event, ASIC announced it is scrutinising COVID-19-related disclosures, following ASX’s head of compliance stating that the exchange had discovered 50 misleading announcements relating to COVID-19. ASX prevented most of the announcements from being released and forced others to be amended or retracted.
ASIC’s Commissioner John Price stated it would not tolerate companies taking advantage of the crisis and would come down heavily on those that mislead investors. A team has been set up inside ASIC to monitor people using misleading or deceptive advertising.
However, both ASX and ASIC expressed that they are prepared to show leniency to companies grappling with reporting obligations. This comes off the back of the multiple waivers and concessions already issued as a result of COVID-19 in relation to capital raisings, annual meetings and financial reporting. An announcement by ASIC in relation to financial reporting for entities with a 30 June balance date is expected later this week or early next week.
The Commissioner added that ASIC will be monitoring all capital raising activity in reliance of the ASX class waivers and also will be reviewing allocations and disclosures to ensure it is clear, accurate and meaningful. In particular, it expects transparent disclosure about why the Board chose a particular capital raising structure.
GRT Lawyers will continue to provide updates as further information is available.
