ASX Queries, page-33

So I got my response from the ASX.

Some of it is (a) patronising, (b) some encouraging but it's mostly (c) "we've told them they're naughty little boys and they promise they won't do it again".

I won't post it all but will add some of the responses. Feel free to guess if the reply is from a, b or c.

ASX would like to thank you for bringing these matters to our attention. Reports of misconduct are an extremely important source of intelligence to supplement ASX’s monitoring activities.

ASX gives careful consideration to all matters raised by every customer who contacts it with concerns about a listed entity.

ASX considers it has consistently exercised the powers available to it in a manner appropriate to the circumstances regarding LWP.

A number of concerns you raised relate to issues of directors’ duties and other matters regulated by the Corporations Act 2001 (Cth) and ASIC. ASX is unable to take any action in relation to these as they fall outside of its jurisdiction.

I can assure that ASX is very aware of LWP’s history of compliance with the Listing Rules and applies an especially high degree of scrutiny to its behaviour.

ASX takes its responsibilities seriously and strives to maintain a well regulated market of high repute and will continue to take appropriate action in relation to any breaches of its Listing Rules that are identified.

The above suggests ASX are just there to slap wrists, no matter how many times Management skirt the listing rules. They listed 10 responses where they took LWP's reactions as acceptable:

•   Required the shares issued to Smart G Finance Pty Ltd, EPSL Pty Ltd, Tara Hudson and Mia Konig pursuant to a placement on 21 July 2015 in contravention of Listing Rule 10.11 to be disposed of, with any profits to be donated to a registered charity.
•   Required the $500,000 investment in Franchise Retail Brands Limited made on or around 13 September 2016 in contravention of Listing Rule 10.1 to be cancelled.
•   Asked LWP to explain the basis on which it believed that its $500,000 investment in Franchise Retail Brands Limited did not require disclosure under Listing Rule 3.1 at the time that it was made. LWP’s response was released to the market on 10 October 2016.
•   Required LWP to lodge monthly cash flow reports to provide greater transparency around the receipt of any funds from Lanstead Capital LP and LWP’s (now discontinued) investments in other quoted securities.
•   Required the directors who received excess shares in their capacity as vendors of Ecopropp Pty Ltd as a result of the incorrect volume weighted average price being used to calculate a milestone payment to dispose of those excess shares on market, and to donate the net proceeds to a registered charity. ASX also required LWP to tell the market what actions it intended to take in relation to the excess milestone shares issued to unrelated vendors. As announced on 3 February 2017, LWP considered writing to the unrelated Ecopropp vendors, but in view of there being 100 vendors, many of whom had since disposed of their holding, ASX understands LWP considered this to be a fruitless exercise, particularly given the practical difficulties of getting the vendors to comply with any request. As an alternative gesture, the directors voluntarily agreed to personally dispose of twice the number of shares required by ASX and to donate the proceeds to charity.

•   Required LWP to explain to the market on 20 January 2017 the basis on which it was determined that Milestone 1 of the Ecopropp acquisition had been satisfied.
•   Sought additional information (which was released to the market on 21 February 2017) about apparent inconsistencies between LWP’s announcement on 7 July 2016 and the Affidavit of Siegfried Konig dated 20 January 2017.
•   Required the description of German laboratory test results as “independent” to be retracted on 13 March 2017. LWP’s subsequent announcement confirmed the identity of the testing laboratory and provided LWP’s explanation as to how the erroneous description occurred.
•   Sought additional information about LWP’s intellectual property arrangements.
•   Required LWP to lodge a supplementary announcement on 31 March 2017 regarding the conditions precedent that cover its Pune Plant facility in India. LWP’s subsequent announcement on 4 April 2017, retracted certain statements made in the 1 March 2017 half –year financial statements and confirmed that a waiver of certain conditions precedent on 25 August 2016 continues to apply.

That's 10 times LWP have had to answer to the ASX in its short history. The above suggests LWP can continue publishing announcements knowing they can change or make good on anything that is deceptive, breaches listing rules or isn't factual. This is evidenced by suspensions that are lifted after responses suggesting Graphenera failed because of 'adverse social media commentary' and misleading announcements that can simply be retracted. The negativity and errors that have plagued LWP has always been passed to others - staff members, social media, family members, company secretaries, price of oil, lawyers, auditors, whistleblowers etc etc.

The fact that LWP is still trading proves the ASX has failed to act quickly and decisively.