You have to wonder where Sanston Securities are in all this, the Corporate Advisors to the transaction.
After all Sanston conducted due diligence on the transaction, have a significant record of executing corporate finance transactions in the Asian market and who introduced the investors to Xstate. The investors were well know to Sanston. https://www.asx.com.au/asxpdf/20170505/pdf/43j1xn0v5wnq57.pdf
I stumbled upon an interesting post Swami 2 made on the Top Stocks site which I have posted below (for the link type "sanston securities asic xstate" into google and it is the first link)
Apr 2017
The main red flag to the ASX should have been the involvement of Sanston Securities Australia in this Cap raise of $25M @3.8c. They were the previous Cap raises of 300,000,000 shares @ 1 cent in June 2016. just 6 months earlier. They raised this money from their Asian clients. Doesn't it seem suspicious that just 6 months later, they announced further non forecasted and unheralded Cap raising @3.8c!!? This announcement conveniently allows their first clients to offload onto unsuspecting retail investors at huge gain to themselves.
Now, let me tell you a bit about Sanston Securities Australia, who the ASX should be well aware of. The ASIC has had prior with the Corporate Head Kit Foo Chye http://sanston.com.au/our-people/
Mr Chye was declared bankrupt in Malaysia in 2010. In 2012 he was managing director of the Australian Public listed company 'Zheng He Global Capital" ASX:ZHE He left the company suddenly in Feb 2012. The following month, the Chairman of ZHE found $19.5 Million missing. and subsequently the company ZHE went bankrupt and removed from the ASX in August 2012. http://www.smh.com.au/business/zheng-he-fights-for-life-as-millions-vanish-20120406-1wh1m.html Not alleging anything here, of course, but an interesting coincidence, is however, that 19.5M is nearly the exact same amount supposedly remitted to Sanston Securities so far from 4 Asian Investors) http://www.asx.com.au/asxpdf/20170221/pdf/43g5gyptxszqsh.pdf
In 2012 Kit Foo Chye took proceedings against ASIC in 2012 to become a director of Sanston Securities,which were subsequently dismissed: "CORPORATIONS – application by a disqualified director for leave under s 206G of the Corporations Act 2001 (Cth) to manage a corporation – principles governing exercise of discretion discussed – application dismissed." http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/FCA/2012/1405.html?stem=0&synonyms=0&query=chye
Now, forgive my suspicious mind but where is the ASX concern of these material events of unsubstantiated dubious claims of 25M investment by 4 asian investors associated with a known operative of dubious background!?
The claim beggared belief but the ASX stood by and watched from the sidelines , the ongoing and continuing debacle of missed payment deadlines that followed and is still ongoing 4 months on!?
Again, forgive my cynicism but does this look like a direct manipulation by Sanston Securities to get their clients rich on the back of a false capital raising notice that they initiated? Raise 300M shares at 1c , make a grand announcement about a further $25M coming in at 3.8c a share. The SP will spike and the Sanston Clients who invested at 1c a share sell out to Australian retail investors at anywhere between 2.4c and 3c a share.
And the ASX is still sitting on it's hands throughout the whole debacle. Because, as the ASX tells me, "..ASX is a market operator, and not a corporate regulator."
(20min delay)
