The Australian Securities and Investments Commission (ASIC) will seek financial penalties and disqualification orders against the former and current directors of Mariner Corporation over its unsuccessful proposed takeover bid for listed financial services company Austock Group Limited.
ASIC said it has commenced legal action in the Federal Court of Australia against the directors and has named Mariner chief executive and managing director Darren Olney-Fraser, current director Donald Christie and former director Matthew Fletcher in the case.
ASIC stated that its concerns go back to a market announcement made by Mariner on 25 June 2012 regarding its intention to make a takeover bid for Austock.
The regulator alleges the announcement was misleading since the “proposed bid was at a price less than Mariner was permitted to offer and because it misled the market as to Mariner’s ability to fund the bid”.
ASIC also alleges that Mariner was reckless “as to whether it could perform its obligations under the proposed bid”, claiming it did not have the required financial resources to fund the bid nor did it have commitments from other parties that they would do so for Mariner at the time of the announcement.
As a result ASIC also alleges the directors breached their duties “by failing to give sufficient consideration to the steps that needed to be taken before making the announcement”.
Mariner has released a statement saying the company and its directors have been co-operating with ASIC since the conclusion of the Takeovers Panel hearing in mid 2012 and will be taking legal advice before making further statements.
Mariner’s first takeover announcement was made on 25 June 2012 with the take-over bid withdrawn on 24 July 2012 after Austock received a competing offer from Folkestone Limited, which went on to buy Austock.
Mariner was also unsuccessful in attempting to acquire a controlling shareholder position in Wilson HTM in late 2012 and early 2013.
The legal proceedings are listed for a directions hearing in the Federal Court of Australia in Melbourne on 12 May 2014.
