The Federal Court of Australia has found that Antares Energy Limited (Antares), now known as Big Star Energy Ltd, has breached continuous disclosure laws with ASX announcements made in 2015 regarding the sales of Antares’ Northern Star and Big Star assets.
Justice Banks-Smith found that Antares breached its continuous disclosure obligations and that former director James Cruickshank failed to discharge his duty as a director to act with the degree of care and diligence required.
Antares made ASX announcements regarding the sale of its Northern Star asset for US$148,788,560 and its Big Star asset for US$105,069,420 on 7 and 10September 2015.
Her Honour found that Antares contravened s674(2) of the Corporations Act by failing to notify the ASX of the following information:
- that Wade Energy was the purchaser under the relevant sale agreements;
- that Antares had not, prior to 15 September 2015, independently verified or otherwise determined the capacity of Wade Energy to complete the purchases; and
- that Antares had been informed by Wade Energy that it had not yet received all funding approval necessary to complete the purchase of the Big Star Asset.
Her Honour also found that Mr Cruickshank failed, contrary to section 180, to exercise the degree of care and diligence that a reasonable person in his position would have exercised in his consideration of whether Antares was required to disclose the information described above, and so in causing or otherwise permitting Antares to fail to disclose the information to the ASX. ASIC was unsuccessful in establishing a separate contravention under section 674(2A) against Mr Cruickshank of being “involved in” the company’s breach.
Appropriate penalties will be determined by the Court at a penalty hearing yet to be set.
In handing down her judgement, Her Honour said, ‘The main statutory purpose of the continuous disclosure regime is to achieve a well-informed market, leading to greater investor confidence. The object is to enhance the integrity and efficiency of capital markets by requiring timely disclosure of price or market sensitive information.’
ASIC Deputy Chair Daniel Crennan QC said, ‘The judgment in this case reinforces the importance of the continuous disclosure regime to maintaining the integrity of the Australian securities market. The omissions from the company’s announcements to the market in this case were clearly material and therefore an appropriate subject for this civil penalty action by ASIC.’