Ann: Error in relation to Listing Rule 7.1, page-8

good question on what happens now.... A companies directors can issue new shares annually up to a maximum % of the existing float without convening an EGM to get approval from shareholders. Obvious reason as you wouldn’t want to wake up one morning and find the directors had tripled the amount of shares on issue by awarding themselves options etc. Typically the default limit is an additional 15% of the float, but can be increased to 25% i think, if they get permission at the AGM.

so in this case, in all the drama of the renegotiation, EML board issued more shares as a % of the float than they were allowed to in order to acquire PFS. Theoretically they should have convened an EGM first, got approval to issue the new shares from shareholders and then they could have closed the revised deal. The calculation is complicated and I’m not sure if you include options, earn out shares in escrow etc in determining the float. I suspect that’s where the mistake was made. Easily done.

I don’t know if ASX could / would cancel the shares as if they had not been issued to PFS etc. worse case I suspect asx could do that, but EML could then just convene an EGM, get approval and issue them. I’m sure shareholders would approve this. So from my perspective, nothing to see here as I suspect asx would already have done so.