LAWFUEL – The Law Newswire – It was reported earlier today that LDC Finance Limited has been placed in receivership at the request of its directors. LDC, along with all other finance companies, had told the Commission last week that its prospectus was up to date and not false or misleading. LDC’s trustee, Perpetual Trust, has said that an unprecedented number of LDC investors had demanded their money back over the last two days.
Where a company’s position changes adversely it is the responsibility of the company and its directors to stop taking further investment money, and to take any other action that is appropriate. The Commission has written to all finance companies to remind them of this.
“If a company’s situation had changed since reporting to the Commission it is appropriate for the directors to act promptly to stop taking further investment money and to preserve the interests of its existing investors”, said Commission acting Chairman Colin Beyer.
If any of the reports made to the Commission were knowingly false, the companies and directors concerned may face prosecution, and a fine of up to $300,000.