Dear All
I wasn't happy with the reply's I was receiving from my initial contact at ASIC so I lodged a complaint and had my case reviewed by a higher level officer. I had several conversations and received a sympathetic hearing. The ultimate outcome is contained in the letter from ASIC received last week. I do not intend to take this matter any further as I feel I have exhausted all options barring legal action. Legal action will cost me far more than I have currently lost so not worthwhile especially with prospects of success close to zero.
So here is the text of the ASIC letter for your information.
Review of your report of misconduct about China Sam Enterprise Group Co., Ltd, Wolf
Petroleum Ltd and others
We refer to your email to ASIC dated 23 February 2021 raising concerns about our
decision and the handling of your report of misconduct (Our Reference: CAS-66362-
G4S7G7).
We also note that we have corresponded with you subsequently regarding the issues
you have identified.
We have reviewed your concerns to ensure the handling of your matter was
completed in compliance with ASIC’s policies and procedures. This letter sets out the
outcome of our review and provides information that may assist.
Your concerns
ASIC understands you consider that:
• China Sam Enterprise Group Co., Ltd (SAM Group) had relocated Wolf
Petroleum Ltd (WPL) offices to China
• SAM Group intends to abscond with a valuable Mongolian asset held by WPL
• WPL failed to respond to ASIC and ASX requests for information
• Chinese interests have orchestrated a raid on WPL (then an ASX listed
company) by manipulating Australian regulatory rules
• Minority shareholders have been left unrepresented and powerless as a result of
the above conduct.
Our role
ASIC is Australia’s corporate, markets, financial services and consumer credit
regulator. ASIC typically responds to alleged breaches of the laws we administer by
considering:
- the extent of harm or loss;
- benefits of pursuing the misconduct;
- the type and seriousness of the matter and evidence available; and
- any available alternative action.
These factors assist ASIC to decide whether further regulatory action is warranted.
ASIC has to consider whether the facts and evidence are sufficient to take action and
change our prioritisation of current matters.
Please see Information Sheet 153 How ASIC deals with reports of misconduct for
further information.
ASIC’s consideration of your report of misconduct
We have reviewed your report of misconduct, including information you provided
against our regulatory requirements and made inquiries of our confidential databases.
Based on the information available, ASIC has decided not to take any action at this
time. We have considered your correspondence and reviewed our previous decision
and will not be investigating the alleged misconduct given the nature and scope of
the conduct reported. ASIC is not required to investigate every reported instance of
misconduct.
The information that you have provided has been recorded on ASIC’s confidential
internal database. Should further information be identified that suggests regulatory
action is required this information will be available for consideration.
Please see Information sheet 151 ASIC’s approach to enforcement for further
information.
Other issues identified
You have raised concerns that the conduct of SAM Group may indicate an
inappropriate or opportunistic takeover of WPL.
Section 606 of the Corporations Act 2001 (the Act) prohibits the acquisition of relevant
interests in voting shares under certain circumstances.
Documents identified in relation to the transaction in 2016 indicate that section 611 of
the Act was relied on. Section 606 does not apply where a special resolution is passed
at a general meeting in which no votes were cast in favour of the resolution by the
acquirer or the disposer or their associates.
Section 611 of the Act also requires an independent expert’s report on the fairness
and reasonableness of the transaction. In this case the independent expert
concluded the transaction was not fair but was reasonable.
It appears that the requirements of the relevant law were complied with and
disclosure made regarding the process.
I note that you have also raised concerns that in ASIC’s reply to you it was not
identified that ASIC had an ongoing activity regarding financial reporting by WPL.
In relation to this claim of inconsistent communication, I note that your report of
misconduct did not appear to specifically raise financial reporting issues involving
WPL. When you subsequently raised the issue of financial reporting ASIC confirmed the
regulatory action in an email dated 22 February 2021.
In addition, at the time of responding to you on 29 January 2021 we had not been
authorised to disclose ASIC’s regulatory action.
Please see Information sheet 152 Public comment on ASIC's regulatory activities for
further information.
In relation to any ongoing concerns over the operation of WPL and protection of
assets and shareholder rights it would appear appropriate to seek legal advice on
what action is open to you or any other aggrieved person to pursue the matter
privately.
Commonwealth Ombudsman
If you have concerns about ASIC’s management of your matter you can lodge a
complaint with the Commonwealth Ombudsman www.ombudsman.gov.au. The
Commonwealth Ombudsman cannot re-determine ASIC's decision, but can review
the manner in which a decision has been made to ensure that it was done fairly and
in accordance with the law.
Yours sincerely
Patrick Foran
Misconduct & Breach Reporting
Assessment & Intelligence
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