The ASX has taken very drastic action against CLZ and suspended...

The ASX has taken very drastic action against CLZ and suspended it from trading. As All listed companies are required to disclose its affairs to shareholders via announcements, including regular quarterly, half yearly and annual reports.

CLZ did not file a half yearly report and so was in breach of continious disclosure rules and was suspended.The company did not appear to be in a sound financial position, and relied on a draw down arrangement with Au Resources (reported at the last quarterly) to service debt and ongoing expenses. No further draw downs have been reported and their has been no mention of it since.

One might assume that this meant the company was, or was close to, trading while insolvent, and if this was the case then an audit report would reveal this, and the auditors or the company would have to call in receivers.

Audited accounts are part of the requirements of a Half Yearly Report. If the companies accounts were not audited then it would be up to the company to call in receivers if it was trading insolvent.Whatever the reason for not submitting the half yearly, CLZ cannot trade on the ASX until it does, and after it complies with any other requirements of the ASX.

CLZ has not given any indication of any desire or move to have the suspension lifted.

The 17th December announcement on the sale of Kat Gap does mention that other companies are allowed oto continue trading for six months after disposal of a major asset, but this information is totally irrelevent to CLZ as it has been suspended from trading.

It does seem quite odd that the most vocal opponent of CLZ on Hotcopper, who appears to have been an insider who had a falling out with company management, claims to have received a “letter to shareholders” that states CLZ will resume trading after the disposal of Kat Gap, and that the ASX has approved it. He has posted details of the exact wording here on Hotcopper, but no other shareholder has received a copy.

The idea that the company may trade for another six months may appease some shareholders into thinking they may be able to sell their shares and take a tax loss. And they may not consider joining any sort of class action that shareholders could take against company executives if there is any suggestion of impropriety.

There are two ways current shareholders could at least get a tax loss, if they sell the shares or if the company is wound up. Someone’s recent suggestion that getting their broker to remove them from his portolio list is disposing of the shares, is certainly not correct, and claiming a tax loss under such circumstances is simply fraud.

So why is the companies greatest critic acting in such a manner, attempting to mislead fellow shareholder’s, and working in company managements interests? Personally I am very wary of people who are playing both sides, especially one who appears to be a former insider.