Please don't just blame painful silence on companies

  1. 28 Posts.
    lightbulb Created with Sketch. 7
    I am familiar with listed entities that have no news and no announcements, and are possibly suspended from trading for a long time, while shareholders are infuriated by silence.

    Often this happens because major transactions/announcements/disclosure documents need ASX approval. ASX approval can take far longer than listed entities would like because:
    • Per ASX listing rule 15.1 (see https://www2.asx.com.au/about/regulation/rules-guidance-notes-and-waivers/asx-listing-rules-guidance-notes-and-waivers ):
    • Entities must give ASX drafts for approval for all disclosure documents, notices of meeting seeking approvals under ASX listing rules, or other documents sent to shareholders seeking approval under listing rules.
    • "ASX will use all reasonable endeavours to tell the entity within 5 business days whether it objects, or that it needs more time to examine the document." - so if ASX decides it needs more time then ASX has no time limit for reviewing documents.
    • Listing rules 1 and 2 have no time limit for ASX. These are relevant for any listing of new shares on ASX or transactions where ASX decides all the requirements for initial listing must be re-met. ASX have become much stricter in recent years, making these processes so demanding that listed shells are worth far less than they used to be.
    • ASX Guidance note 1 2.5 Processing time mentions that ASX's decisions may take longer than 6 weeks if there are any complications. https://www2.asx.com.au/content/dam/asx/rules-guidance-notes-waivers/asx-listing-rules/guidance-notes/gn01_admission.pdf
    • The power of ASX over small listed entities discourages small entities from ever blaming ASX for interminable delays and infuriated shareholders.
    • Although people may blame ASIC, because people have difficulty dealing with ASIC for other matters, ASIC is relatively nice.

    Shareholders also often experience painful silence because of counter-parties to transactions (including intractable or obstinate minor shareholders of vendors that change their mind at the last minute when these minor shareholders finally read contracts that were sent to them a year earlier). Publicly criticising obstinate irritants is often counter-productive.

    How much do infuriated shareholders understand these problems?
    Last edited by polonypolony: 27/10/21
 
arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.