So a rights issue was made available to all eligible shareholders.... Not taken up by the majority so a shortfall of 30m resulted... Directors could place at their discretion and filled the shortfall to raise funds in the interest of the company. Out of the 30m they placed, 5m were placed with the parents of one director - for the same price as everyone else, and only after eligible shareholders had an opportunity to buy.
Since parents are associates, and because the shortfall placement hadn't required shareholder approval... this peculiar circumstance resulted in placement to an associate occurring without shareholder approval. Thus a breach of an ASX rule.
Shares in question were promptly sold for no profit to re-comply.
That's my reading of it. Hardly a biggie in my view and doesnt shake my faith in directors at all.
CHK Price at posting:
2.5¢ Sentiment: None Disclosure: Held
