I wish to advise that a number of announcements were made on ASX this morning and you have received an ASX Alert from the Company in relation to this.
Firstly, the achievement of the 2017 Performance Shares and targets set on that milestone is an outstanding achievement and is further testament to the hard work put in over the last twelve months by the Team at Star.
Secondly, an announcement has been made regarding breaches of the ASX Listing Rules.
The breaches were in two parts. The ASX has deemed that my personal participation both individually and via entities that I control, in the rights issue, top up facility and shortfall placements of June 2016, which raised a total of over $6.5 million, were in breach of the listing rules. You may recall last year we acquired the Cash My ATM Network and the financing required to undertake this acquisition was managed by myself with minimal assistance from our corporate advisors at the time.
This included, unbeknown to a number of shareholders a personal sub-underwriting agreement as between myself and the Company to underwrite the funding which was originally going to be part of a larger underwriting agreement and lead manager role with our corporate advisers. The underwriting was not needed from our corporate advisers and was not put in place and in fact our corporate advisor agreements were terminated a short time later. This was a very stressful time but I got the deal done.
As a result, I participated in the rights issue, top-up and the shortfall placement for a total of 8,541,252 shares at 3.6 cents per share.
The ASX did not have an issue with my participation with the rights issue, but did have an issue with the top-up placement and also the shortfall placement despite the validity of the sub-underwriting agreement. Whilst all shareholders were afforded an ability to participate in the rights issue and top up, the ASX have requested that I dispose of those placements and/or the Company could buy-back those securities and this represents a total of 4,166,991 ordinary shares in the above placement. Any profits are to be donated to charity.
Whilst I do not personally agree with the ASX determination, I have been directed by the Company to dispose of those securities and I am abiding by that direction and the direction from ASX.
However, I wish to advise that I will be immediately re-acquiring those shares.
Further, the ASX has determined that the participation by a related party in the more recent private placement to acquire the Indue ATM businesses was also a breach and this represented an amount of 4,000,000 ordinary shares purchased at 2.8 cents per share.
This was a genuine oversight and one which I regret. There is an upcoming general meeting where both myself and Evan McGregor, as directors, have indicated that we will request the permission of shareholders to participate in the private placement. This placement, to the related party, should have also been the subject of such an approval.
The ASX has requested that these shares be disposed of and/or the Company can buy them back. Again, the related party has been directed by the Company to dispose of those shares and the related party has already abided by that direction. There was not a profit from the share proceeds. In addition, the free options that were attached to that placement will not be allotted to the related party and the current notice of meeting proposed to send to members is being amended and will be forwarded to shareholders, shortly.
I wish to point out that the ASX plays an important role in ensuring that Companies comply with the ASX listing rules and I personally regret the oversight. The Company prides itself on maintaining an extremely high standard of corporate governance and this oversight was genuinely just that. This oversight will never happen again.
