They lie to the shareholders and people want to buy CMQ?
Chemeq faces $1.2m fine after disclosure violations
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Rebecca Urban
June 30, 2006
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DRUG maker Chemeq has agreed to cop on the chin the possibility of a hefty fine, after admitting to the corporate watchdog it flouted its legal obligation to keep shareholders informed of its activities.
Chemeq said yesterday it had reached a settlement with the Australian Securities and Investments Commission. ASIC launched court proceedings in December 2004 alleging the Perth-based company had contravened its continuous disclosure obligations on seven occasions.
As part of the settlement, Chemeq, which makes an antibiotic replacement drug for the livestock market, has agreed to acknowledge two of the contraventions.
One relates to its failure to inform the market, between February 2003 and August 2004, of the increased cost of building its factory at East Rockingham, south of Perth.
The other relates to not telling the market that a United States patent had been granted for a product. The Federal Court in Perth will decide on Monday whether to fine the company.
The breaches carry a maximum combined penalty of $1.2 million.
Chemeq has agreed to pay $170,000 towards ASIC's legal costs.
Chemeq managing director David Williams said the company agreed to settle because it wanted to avoid a long and costly trial.
"As far as I'm concerned, it's a commercial settlement and looking at it from what's the best thing for the company, that's not to accumulate large legal costs and tie up management in court," Mr Williams said. "Let's get on with moving forward."
Mr Williams was not employed at Chemeq when the contraventions took place.
"Chemeq remains committed to full and proper disclosure, and we have in place strong public reporting procedures to ensure that Chemeq meets all its continuous disclosure obligations," he said.
Chemeq shares closed half a cent higher at 31¢.
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