Not really.... If someone sold their shares they have broken the law, potentially with out even knowing it.
The following is from a post I made on another thread. So it’s not KNM specific but applies to all companies. If it still does not make sense let me know and I will try to simplify it.
Back to xxxxx’s original question “and the primary purpose of this cleansing prospectis is?”
The cleansing prospectus applies to Shares issued without disclosure, which have an automatic escrow period of 12 months. The shares cannot be sold and are restricted from trading.
A cleansing prospectus is issued to remove the automatic ‘escrow’ period fromthese shares and therefore allows them to be sold. It Applies to undisclosed shares issued prior to the closing date of the prospectus.
It’s meant or substantiate or to prove that all information that was supplied to whoever purchased / received the shares has been supplied to the market in general!
If the company had not been suspended for over 5 days they could have issued a “Cleansing Notice” Because they were suspended for >5 days they must issue a “cleansing prospectus” to remove the automatic trading restrictions!
If you read the following quote from the cleansing prospectus, you might understand?
FROM the cleansing prospectus....
“To ensure shares issued are freely tradeable (i.e. not subject to secondary trading restrictions in the Corporations Act) the Company is obliged to issue a cleansing notice under section 708A(5) of the Corporations Act (Cleansing Notice), or issuing a prospectus under section 708A(11) of the Corporations Act.
The Company is unable to issue a Cleansing Notice as its shares were suspended from trading on ASX for more than five (5) trading days over the last 12 months. Accordingly, the primary purpose of the prospectus is to facilitate secondary trading of any shares that may be issued by the Company before the closing date under the prospectus.”
KNM Price at posting:
3.3¢ Sentiment: None Disclosure: Not Held
(20min delay)