asic

Sack the directors and let this company develop its promising products further.

HIV claim draws ASIC attention
By Jamie Freed
Sydney
October 8, 2005

THE Australian Securities and Investments Commission confirmed it was inquiring into whether Citrofresh's announcement about the product's ability to prevent the spread of HIV was a proper disclosure.

After the Geelong disinfectant maker on Tuesday last week claimed its product could kill the HIV and flu viruses, shares more than tripled to 70¢ before the Australian Stock Exchange asked the company to disclose further details.

It was revealed this week that two company directors took advantage of the price spike and sold large parcels of shares at 56.2¢ and 57.7¢ for a significant profit on Tuesday last week. The price slipped back to 35.5¢ after Citrofresh answered the ASX's questions the next day.

ASIC spokeswoman Angela Friend said that although the corporate regulator was making inquiries, "it's not necessarily a formal investigation at this stage".

Non-executive director Mathew Walker picked up $577,000 by selling all 1 million of his shares after the company made its initial announcement.
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The price he achieved was the highest at which shares had traded since 2001.

"For a public company director to sell shares is not doing anything wrong," he said. "I will co-operate fully with the ASIC investigation. In fact, I welcome it."

After warning that a Sydney Morning Herald article on Thursday about his share trading had a "sinister influence", he wished to emphasise that he still held 1 million Citrofresh options exercisable at 10¢ each before May 2008.

"Why does a director selling shares make the front pages of your business section?" he asked. "Clearly, there are inferences and insinuations that make this article newsworthy."

A company associated with non-executive chairman Ron Gajewski converted 500,000 options at 25¢ each on Tuesday last week and sold 430,880 the same day.

Mr Gajewski was on annual leave and could not be reached for comment yesterday.