Source : Perth Now news
The corporate watchdog is examining whether four global bankers misrepresented investor demand for shares in AI tech company Firmus.
Speaking at a senate estimates hearing, Australian Securities and Investments Commission (ASIC) chair Sarah Court said targeted inquiries were being made into Morgans, the Bank of America, JPMorgan and Morgan Stanley.
Firmus hoped to raise $US5.5bn ($A7.8bn) with its initial public offering (IPO) at $11 per share, with a valuation of about $44bn.
But the bid was pulled from ASX following investor concerns about its valuation, revenue and cash flow.
Had the initial public offering managed to attract buyers at $11 a share, the launch would have been the biggest since Telstra in 1997 and made Firmus worth about as much as Woolworths.
Ms Court confirmed to senator David Sharma that ASIC was interested in how bankers represented investor demand, recorded investor interest and managed potential conflicts.
Mr Sharma asked Ms Court if ASIC had seen an email sent from Morgans brokers to clients about the enormous demand for billions of dollars worth of stock and “to get a rattle on” if they wished to participate.
“The team will absolutely have seen it senator,” Ms Court replied.
She said ASIC had not started a formal investigation but would be looking at correspondence to understand the broader context.
“We’ve got a report that makes very clear that lead managers must have a responsible basis for representations about investor demand, so that is one of the things that our inquiries will be considering,” she said.
Senator Sharma said media reports indicated brokers and their highly valued clients invested heavily into early fundraising rounds and there was a risk those holders sold into the float, talked up the valuation and made very large profits.
“It’s fair to say that we are having a look at the broad range of issues,” Ms Court said.
“This was a very significant event, we understand that, and we need to look at it carefully and that’s what we’re doing.”
Firmus was co-founded by Australian billionaire Oliver Curtis, who was jailed over insider trading more than a decade ago. He is the husband of PR queen Roxy Jacenko.
Other co-founders include his father Nick Curtis, Tim Rosenfield and Jonathan Levee.
