Memphasys Limited Faces Compliance Issues, Retracts Cleansing Notice
MEM (MEM) Share Update September 2024 Friday 6th
Memphasys Limited Retracts Cleansing Notice Amid Compliance Concerns
Memphasys Limited (ASX: MEM) has retracted its Cleansing Notice after discovering compliance issues related to the disclosure of excluded information. This move comes after a query from the ASX regarding the validity of the notice.
Instant Summary:
- Memphasys Limited retracts Cleansing Notice issued on 29 August 2024.
- ASX raised concerns about the inclusion of excluded information in the notice.
- MEM confirms the shares issued have not been traded and are under a holding lock.
- MEM will release a separate announcement to ASX retracting the Cleansing Notice.
- MEM confirms compliance with Listing Rules, particularly Listing Rule 3.1.
Background
On 29 August 2024, Memphasys Limited issued a Cleansing Notice to the ASX, aiming to cleanse securities for secondary sale purposes. However, the ASX raised concerns that the notice might be defective due to the inclusion of 'excluded information' as defined in sections 708A(7) and (8) of the Corporations Act 2001.
In a letter dated 2 September 2024, the ASX queried whether MEM was aware of the contents of its Final Report at the time of issuing the Cleansing Notice. The ASX also questioned whether the information disclosed in the Final Report was necessary for investors to make an informed assessment of MEM's financial position and prospects.
MEM's Response
MEM responded by confirming that the information in the Final Report was indeed necessary for an informed assessment. The company also acknowledged that the Cleansing Notice was not validly issued, as it did not include the required excluded information.
MEM stated that the shares issued on 28 August 2024 have not been traded and are currently under a holding lock. The company plans to release a separate announcement to the ASX retracting the Cleansing Notice and taking further action to cleanse the shares for secondary sale.
Compliance and Authorization
MEM confirmed that it is complying with the ASX Listing Rules, particularly Listing Rule 3.1, which pertains to continuous disclosure. The company also confirmed that its responses to the ASX's questions were authorized and approved by the MEM Board.
The retraction of the Cleansing Notice could have a negative impact on MEM's stock price as it raises questions about the company's compliance and internal processes. Investors may react cautiously, awaiting further clarity and additional disclosures from the company. The holding lock on the shares also indicates potential delays in liquidity for those securities.
Investor Reaction:
Analysts are likely to view this development with concern, as it highlights potential gaps in MEM's compliance and disclosure practices. While the company has taken steps to address the issue, the market may react negatively in the short term due to the uncertainty surrounding the situation.
Conclusion:
Investors should closely monitor MEM's upcoming announcements and any further actions the company takes to address the compliance issues. Staying informed will be crucial in making well-informed investment decisions regarding MEM's stock.