It’s never too late, except when it is: the dangers of late report lodgement
On 12 March 2021, ASIC exercised its power under s713(6) of the Corporations Act 2001(Cth) (Corporations Act) to prevent TBG Diagnostics Limited (TDL) from relying on the exceptions in section 713 to issue a short-form, transaction specific prospectus, until 11 March 2022.
TDL is a public company, listed on the Australian stock exchange.
ASIC’s reasoning for making this determination was based on TDL’s failure to lodge required reports for the TDL’s financial year (which ended 31 December 2019), within the three month timeframe required by the Corporations Act.
Per TDL’s 18 March 2021 ASX announcement, mitigating circumstances prevented TDL from meeting the required Corporations Act timeframes, but despite applying to both ASIC and the ASX for an extension of time to lodge the reports, no extension was granted.
TDL ended up lodging the required reports on 15 June 2020, paying the associated late lodgement fee.
The determination does not directly impact the operation and business of TDL, but means TDL will not be able to rely on the reduced disclosure rules of section 713, and must instead issue a full prospectus if funds were to be raised before 11 March 2022.
Section 713 recognises that, for a listed company subject to disclosure obligations, much of the information usually provided in a prospectus relating to a securities issue will already have been released to the market under those obligations. As such, section 713 limits the information which must be provided in a prospectus relating to “continuously quoted securities of a body” to transaction-specific information, such as the effect of the offer on the body, and any update to information not previously disclosed to the market. The reduced content requirements can make section 713 prospectuses quicker (and cheaper) to produce.
This action by ASIC serves as a timely reminder of the importance of lodging required reporting within the required timeframe, as failing to do so can have consequences beyond the imposition of a late filing fee.
If your company is having issues with meeting required reporting timeframes, and would like further advice on this, please contact our Corporate Advisory and Governance team.