creating a false market

Having just read the Notice of General Meeting to remove/replace the auditor, something struck me as very concerning.

RSM Bird Cameron Partners, the existing Auditors wrote "...we reasonably held the belief, that the Compnay had contravened the Corporations Act.....we reported the matters to the Australian Securities & Investments Commission (the ASIC)..."

Our auditors reported matters to ASIC about contravention of the Corporations Act and not just a single contravention, but contravening 5 sections, including that the Company (is that the Board or Management?) had contravened by "THE CREATION BY THE COMPANY OF A FALSE MARKET IN THE SECURITIES" and not just in the period leading up to June 2011, but AGAIN in the lead up to Dec 2011. Was that option deal (yet to be paid for) part of this "false market"? Is creating a false market the same as market manipulation? Does this explain why the share price has fallen and stayed low? Does this explain why we have no institutional shareholders?

Why have we not been informed of this?

Back in November, we were asked to vote for directors, including John O'Connor, who had "over 30 years experience in the financial markets. He has worked for and run a number of Stockbroking organisations, both in Australia and the US." He resigned, just a few short months later, on the 19th Feb. As an experienced stockbroker, why did he resign in less than 3 months after being appointed by shareholders? Did he feel uncomfortable with whatever "creating a false market" means?

And now the Board of our company is saying "remove the auditors"? Why are they asking this when the auditors have pulled them up for what the auditors believe are contraventions of the Corporations Act? Is this a case of shoot the messenger (whistleblower)? If the company was in contravention of the Corporations Act, isn't the auditor duty bound to report this? Isn't the company duty bound to tell us?

Should we vote to keep (not remove) the auditors if they are asking the right questions?

Another contravention was that "the Company faild to comply with its Continuous Disclosure obligations" and yet they have not disclosed to us shareholders what has gone on here.

What has ASIC done?

Are these contraventions criminal acts? If so, what recorse do we as shareholders have?

I, for one, am very worried about this.