Response to my complaint to ASX submitted at time of ASIC complaint......sorry about formatting.
Thank you for your online report dated 22 February 2017 raising concerns about ASX’s handing of RRP.
You state in your report that ASX has deemed RRP to be “in breach of listing rules 11.1.2 or 11.1.3”. That is not entirely correct.
Listing Rule 11.1 requires a listed entity to notify ASX of a proposed significant change to the nature or scale of its activities before it is completed. In breach of that rule, RRP announced that it had completed the Foxleigh transaction on 31 August 2016, without giving any prior notice to ASX.
It was not apparent on the face of RRP’s announcement of the transaction that it did involve a significant change to the scale of its activities. That issue came to ASX’s attention following a tip-off from a third party. When ASX examined the transaction following that tip-off and then made further enquiries of RRP, it became evident that the transaction was in effect a back door listing of the Foxleigh asset. Consequently, ASX exercised its discretion, as it always does in the case of a back door listing, to require shareholder approval of the transaction under Listing Rule 11.1.2 and RRP to re-comply with ASXs admission requirements in Listing Rule 11.1.3. In addition, in accordance with its usual practice when an entity announces a back door listing transaction, ASX suspended trading in RRP’s shares pending the release of an announcement with sufficient information about the transaction for trading in its shares to take place on a reasonably informed basis.
ASX’s processes for dealing with back door listings are widely known and well understood by the market. They are outlined in detail in Guidance Note 12 Significant Changes to Activities(GN12), which can be viewed online at:
Unfortunately in this case, it would appear that when RRP entered into and completed the Foxleigh transaction, RRP and its advisers were either not aware of, or did not understand, RRP’s obligations under Listing Rule 11.1 and ASX’s guidance in GN 12.
RRP’s suspension is a direct result of it not having complied with the Listing Rules. Its continued suspension is a direct result of it not being in a position to do the things required under GN 12 for its securities to return to trading after having announced a back door listing transaction (see, in particular section 2.10 of GN 12). Page 2 of 2
You also make the statement that ASX gave tacit authorisation for the Foxleigh transaction and suggest that it is inappropriate now for ASX to take action under Listing Rules 11.1.2 and 11.1.3. That too is not correct. As mentioned previously, RRP announced the completion of the Foxleigh transaction without having any prior discussions with, or giving any other notice to, ASX. The fact that RRP’s announcement was released on the ASX Market Announcements Platform in the normal course was not in any way a tacit authorization by ASX of what was announced.
ASX welcomes your feedback but considers that it has acted appropriately in the circumstances. Hopefully this letter has helped to clarify the situation for you. Yours sincerely [sent electronically without signature] Stephanie So Senior Adviser, Listings Compliance
RRP Price at posting:
4.1¢ Sentiment: Hold Disclosure: Held
