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01/027 ASIC accepts disclosure undertaking from Pahth Telecommunications Limited
The Australian Securities and Investments Commission (ASIC) announced today that it has accepted an enforceable undertaking from Pahth Telecommunications Limited (Pahth), a Western Australian-based technology company.
ASIC received the undertaking after raising concerns about Pahth’s compliance with the continuous disclosure obligations in the Australian Stock Exchange’s (ASX) Listing Rules and the Corporations Law.
“ASIC is continuing to actively monitor the continuous disclosure activities of public companies”, Michael Gething, Acting WA Regional Commissioner, said. “People make investment decisions based on the accuracy of publicly available information about listed companies. ASIC will act to protect investors by ensuring that publicly listed companies comply with their continuous disclosure obligations”, Mr Gething said.
ASIC was concerned that Pahth had failed to issue a revenue and profit downgrade around June 2000 at the same time that it announced to the market that key strategic negotiations would not be proceeding.
The enforceable undertaking requires Pahth to review its internal procedures for ensuring compliance with its continuous disclosure obligations, and to have those procedures independently audited by a senior member of the stockbroking profession. It also provides for Pahth to review, formalise and annually audit its corporate governance practices.
Pahth’s prospectus issued in September 1999 contained a revenue projection for the 1999/2000 year of approximately $19.6 million and anticipated a net loss after tax of $5,000.
Its preliminary financial report for the same period, issued in September 2000, showed actual revenue for the same period of just over $11.5 million and a net loss after tax of more than $1.15 million.
Pahth has a month to complete its compliance review, have its procedures audited and report back to ASIC.
Pahth fully cooperated with ASIC after the concerns were brought to its attention.