Businessman’s second round of illegal offers thwarted

A Victorian-based businessman and his company have landed in hot water for the second time this year following attempts to buy debentures at one-third of their estimated market value.

The Federal Court of Australia yesterday found Dr Robert Ross and his company Ross Investments had knowingly contravened the Corporations Act by making unsolicited and unfair offers to holders of debentures in Cambridge Credit Corporation to purchase those debentures. Many of these debenture-holders accepted Ross’ offer.

Justice Ray Finkelstein ordered Ross to write to Cambridge debenture-holders notifying them of their estimated value (at least three times greater than what Ross offered for them) and give them the option to terminate their agreements and recover their debentures.

Earlier this year, the Federal Court found Ross and his company had sent illegal unsolicited offers to shareholders of another company, Incitec Pivot.

Both court orders follow Australian Securities and InvestmentsCommission (ASIC) investigations.

ASIC executive director, enforcement, Jan Redfern said in a statement that the decision highlights that unsolicited offers to buy financial products off-market, including shares and debentures, must contain the product’s fair or market value.

“This is to ensure someone who receives an offer can make an informed decision about whether or not to accept it.”