"Sounds like a proceedural error. Not good, but they happen now...

"Sounds like a proceedural error. Not good, but they happen now and again and is not material."

https://www.hopgoodganim.com.au/news-insights/inadvertent-failure-lodge-cleansing-notices/

You got that right pussycat. About the only thing you have got right on this forum

Here's a breakdown of the potential penalties and issues:

1. On-Sale Restrictions:

• 12-Month Restriction:

  Securities issued without a cleansing notice (or other required disclosure) cannot be traded or on-sold for 12 months after their issue, unless an exception applies (like a subsequent disclosure document), according to some legal resources.
• Impugned Title:

  The title of anyone who acquires shares without a cleansing notice (or who acquires from someone who did not receive a cleansing notice) may be challenged.
• Potential Liability:

  Shareholders who on-sell shares in breach of this restriction may face civil penalties and other liabilities, even if they were unaware of the company's failure to issue a cleansing notice.

2. Company Liability:

• Civil Penalties:

  Companies that fail to issue a cleansing notice when required may be subject to civil penalties.
• ASX Consequences:

  The ASX may suspend trading in the company's securities or take other actions.
• Potential for Legal Action:

  Aggrieved shareholders may bring legal action against the company.
• Remediation:

  Companies will need to take steps to remedy the failure, which may include obtaining relief from the court and lodging a cleansing notice or prospectus.

3. Court Relief:

• Seeking Relief: If a company discovers it has not issued a cleansing notice, it should seek urgent relief from the court to validate the on-sales of the affected shares.
• Court Considerations: The court will consider whether the company acted honestly, whether it was just and equitable to grant relief, and whether any substantial injustice has been caused.
• Importance of Prompt Action: Prompt action to remedy the failure is crucial for obtaining court relief.

4. Shareholder Awareness:

• Good Faith vs. Knowledge:

  Shareholders who are unaware of the lack of a cleansing notice and trade in good faith may be treated differently than those who are aware of the breach.
• Importance of Disclosure:

  Companies need to ensure that shareholders are properly informed about the cleansing notice requirements.

In essence, the failure to issue a cleansing notice when required can lead to a cascade of negative consequences for both the company and its shareholders, highlighting the importance of proper disclosure under the Corporations Act.