LAWFUEL – Law News Network – Mr Jeffrey Lucy, Chairman of the Australian Securities and Investments Commission (ASIC), today announced that ASIC has settled with listed company, Chemeq Limited (Chemeq), following civil penalty proceedings ASIC commenced against the company in the Federal Court of Australia on 23 December 2004.
Under the agreement, Chemeq has consented to declarations being made that it contravened the market disclosure provisions of the Corporations Act.
ASIC is seeking the following orders:
• declaration that Chemeq, between 10 February 2003 and 30 April 2004, did not tell the ASX certain information about the increased costs of constructing and commissioning its manufacturing facility at East Rockingham in Western Australia when that information was, throughout the period, not generally available and information which a reasonable person would expect to have a material effect on the price or value of the fully paid ordinary shares in Chemeq;
• declaration that Chemeq, between 10.22 am AEST on 6 October 2004 and 3.36 pm AEST on 7 October 2004, did not tell the ASX certain information concerning a US patent when that information was, throughout the period, not generally available and information which a reasonable person would expect to have a material effect on the price or value of the fully paid ordinary shares in Chemeq;
• pecuniary penalties in such amount as the Federal Court considers appropriate for each contravention; and
• Chemeq pay ASIC’s costs fixed at $170,000.
Chemeq has agreed with ASIC that it is appropriate for the Federal Court to declare that it contravened the continuous disclosure provisions of the Corporations Act on two occasions, and to make orders imposing pecuniary penalties.
The matter will be heard in the Federal Court on 3 July 2006. As this matter is currently before the Courts, ASIC will be making no further comment.
Background
Chemeq is a pharmaceutical company based in Bentley, Western Australia.
Following referrals from the Australian Stock Exchange (ASX), in September 2004, ASIC commenced an investigation into failures by Chemeq to comply with its continuous disclosure obligations.
ASIC sought pecuniary penalties against Chemeq. Under the Act, the court may impose a penalty of up to $200,000 for each contravention prior to 1 July 2004. Following the commencement of the CLERP 9 legislation, this penalty increased to $1 million for a contravention by a body corporate that occurs after 1 July 2004.
