Baillieu Valuation of VEC, page-417

Re: A cleansing prospectus

Quote “.........what the company itself explicitly stated the cleansing prospectus was not intended to be doing (i.e not to raise capital”

If I have read your post correctly? The reason it is not intended to raise money is as follows.

As a cleansing “prospectus” has to raise some $, usually a very small amount, the intention of the prospectus is not to raise capital because it costs more to produce than it will raise.

Say it raises $4k the cost could be say $16k so it costs more to produce than it raises.

Again.,The purpose of the cleansing prospectus is to remove automatic trading restrictions on any shares issued “without disclosure” before the closing date of the prospectus.


(So it could remove the trading restrictions from an undisclosed CR, as long as the CR shares were issued prior to the closing date)


Effectively the cleansing prospectus is a requirement to state / prove that the people that are issued the shares without disclosure are not privy to any market sensitive information that the general market has not been told.

If shares are issued without disclosure, people could have an unfair advantage, so the shares will have an enforced compulsory escrow period.

This is designed to prevent an unfair advantage to the purchaser of the shares and protect the uninformed people.