AVZ (ASX) Ann: Huayou Cobalt Group Increases Shareholding in AVZ

Originally posted by eshmun ↑

Strange announcement.

The responsibilty under section 671B of the corporations act for providing substantial holder notices and changes to substantial holders notices is that of the "person" /company who has had a change in their relevant interests (ie Huayou) not the company in which those relevant interests have changed (ie AVZ).

That person/ company also has an obligation under the same law to notifiy the market when its holding exceeds or falls below 5% or when there is a change of holding of plus or minus 1% above the 5% threshold and this notification must be made within 2 business days of becoming aware of this change. The notice to the stock exchange should also include details about the nature of the change of the relevant interest and what consideration, if any, was given for such change.

CORPORATIONS ACT 2001 - SECT 671B

http://www5.austlii.edu.au/au/legis/cth/consol_act/ca2001172/s671b.html

Why is it any of AVZ's business to be announcing this change? It is not their duty under the law. Does this mean the change was smaller than 1% or are AVZ just pre-empting the official notice by a day or two. This to me goes contrary to the principle of keeping the market continously and properly informed as there were no details given about the quatum or nature (/consideration paid) of/for the change, unless one references the quantum back to previous disclosures and even then why would AVZ take on Huayou Cobalt's legal responsibilty. A proper disclosure would also need to disclose the dates of any buying or selling that contributed to trigger the notification thresholds. Seems silly to me that AVZ would take on another entities legal responsibilty, because it might create a potential legal association of agency or leave AVZ open to the consequnces of having made a mistake or misrepresenation, if the notice was in some way in error. Of course if the change was less than 1% then AVZ wouldn't be taking on Huayou's legal responsiblity under the corporations law.

The annoucement is not marked as material on my trading platform so why make it when it is not your legal responsibilty. Of course the market has taken it as material pushing the stock price up over 7%. Esh

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Maybe issued by AVZ to acknowledge Hauyou
increasing their % holding back to what is required to retain a seat on the board after the dilution from the CR.

Maybe issued by AVZ to acknowledge Hauyou increasing their %...