ASIC raises new hurdle after finding gap in Smiles’ paperwork
Smiles Inclusive may have put down one rebellion and a bid to overthrow its board but a second has emerged just as it hit another roadblock in its bid to raise $8 million from investors.
More trouble for Smiles Inclusive
The Gold Coast-based dental group has been told by the Australian Securities and Investment Commission that it cannot rely on a reduced-content prospectus until 19 October 2021.
The decision means Smiles must issue a full prospectus if it wishes to raise funds from retail investors.
ASIC said its decision was based on Smiles’ failure to lodge a financial report, directors’ report and auditor’s report for the half-year of the company, ended 31 December 2019, within 75 days, as required under the Corporations Act 2001.
“ASIC 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,” it said.
“Where a company fails to comply with its periodic disclosure obligations in a full, accurate and timely manner, ASIC 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’s prospects and financial position.”
Smiles has the right to appeal to the Administrative Appeals Tribunal for review of ASIC’s decision.
The decision follows the cancellation of an extraordinary general shareholder meeting to vote out the existing board after months of scandals within the company. Smiles said it had received enough proxies to defeat any resolution out to the meeting.
However, almost immediately the requisitioners of that meeting called a general meeting indicating they held 5 per cent of the shares.
The group wants to appoint Joao Camacho, Philip Makepeace and Arthur Walsh to the board and replace existing directors.
“The company is disappointed and incredibly frustrated at receiving yet another notice from the requisitioners attempting to spill the board,” it said.
“The EGM represents the fourth time within a period of less than two years that Dr Camacho has sought to remove the directors and to be elected to the board.
“The EGM is an unnecessary and costly distraction from the board and management’s efforts to turn around the Smiles Inclusive business.
“The company is investigating the validity of the request.”
Smiles’ securities are currently suspended from being traded on the Australian Securities Exchange.
