ASIC breaks its silence to defend its actions over Fincorp
The corporate watchdog has broken its silence to defend its actions against failed property developers Fincorp, saying the issuing of prospectuses and their accuracy is not its responsibility.
Recent media reports have claimed Fincorp was about to issue a prospectus for a capital raising venture of $500 million just before it was placed into administration.
"ASIC is not responsible for approving prospectuses," the regulator said.
"However, as part of its market surveillance, ASIC reviews a percentage of prospectuses, for proper disclosure. It has reviewed Fincorp prospectuses."
ASIC had previously refused to speak to the media about any matter relating to the Fincorp collapse.
It said since 2002, on six occasions it forced Fincorp to improve the quality of its disclosure documents, which included court action.
"In 2005, ASIC required Fincorp to withdraw certain advertisements, and correct others, and to stop promoting its investments as secure and guaranteed," the regulator said.
It said responsibility for preparing prospectuses and for their accuracy is on the issuer and its advisers.
ASIC said debenture holders - of which the majority of investors used to loan money to Fincorp - were the responsibility of the trustee, which in Fincorp's case was Sandhurst Trustees, a subsidiary of Bendigo Bank.
"The trustee has a duty to exercise reasonable diligence to see that investments are sufficient to repay capital and interest owed to those debenture holders."
ASIC said it is investigating possible actions against Fincorp.
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