iSelect investors left in dark over ASIC inquiry
Shares in iSelect fell more than 4 per cent on Monday after BusinessDay revealed the regulator had demanded internal documents from the company after its ill-fated float on the sharemarket in June.
Later in the day, the company confirmed the probe, saying in a statement to the market that it was "corporate policy" not to comment on communication with the regulator. But the Australian Shareholders Association said the disclosure should have been made earlier given the potential for it to affect the market.
"One would like to know immediately if ASIC is taking action," chairman Ian Curry said. "When you've just floated, and your share price drops 40-odd cents almost straight away, and then something else like ASIC comes up, you're better to go out there and have as much disclosure as possible."
iSelect's confirmation of the probe comes 10 days after the regulator made its initial request for documents on September 6. In a notice obtained by BusinessDay, the regulator demanded iSelect hand over financial records, emails and meeting minutes relating to its profit announcement on August 29 in which the company admitted it had missed its revenue target.
ASIC has requisitioned the documents as part of an inquiry into the company's compliance with continuous disclosure and fund-raising laws. It also called for documents relating to iSelect's announcement on the same date that it expected to meet the earnings forecast for the 2013 calendar year contained in its prospectus.
The company said on Monday that it was co-operating fully with investigators. "iSelect's corporate policy is not to comment on confidential communications with regulators," it said.
"However, given today's media coverage regarding a 6 September information request from ASIC, the company considers the existence of ASIC's request to no longer be confidential.
"The company takes its regulatory obligations seriously."
Mr Curry said the ASA had sought a meeting with iSelect over the next few weeks to discuss the August 29 announcement.
"We're going to seek more information and an explanation," he said. "At the moment it's difficult to see just why the numbers have varied to that extent."
iSelect's announcement revealed group revenue of $118 million, 2.9 per cent below the prospectus forecast of $121.6 million.
The company said the regulator's request "should not be construed as an indication by ASIC that a contravention of the law has occurred".
"The company remains of the view that it has fully complied with all of its regulatory obligations."
iSelect shares were down 4.3 per cent to $1.34 on Monday.
Frequently Asked Questions about this Article…
ASIC has requested internal documents from iSelect as part of an inquiry into the company's compliance with continuous disclosure and fund-raising laws. The regulator sought records relating to iSelect's August 29 profit announcement and statements in its prospectus about meeting 2013 earnings forecasts. The initial document request was made on September 6, and iSelect confirmed the probe about 10 days later.
Shares fell after BusinessDay revealed that ASIC had demanded internal documents. The market reacted to the disclosure and uncertainty: iSelect shares dropped more than 4% on the day the story broke and were reported down 4.3% to $1.34 on Monday.
ASIC requisitioned financial records, emails and meeting minutes relating to iSelect's August 29 profit announcement, when the company admitted it had missed its revenue target. The regulator also asked for documents tied to iSelect's announcement that it expected to meet prospectus earnings forecasts for the 2013 calendar year.
iSelect initially said it has a corporate policy of not commenting on confidential communications with regulators and later stated it is cooperating fully. After media coverage, the company said the existence of ASIC's September 6 request was no longer confidential and disclosed the probe. The Australian Shareholders Association has said the company should have made the disclosure earlier given the potential market impact.
ASA chairman Ian Curry said shareholders should be informed immediately if ASIC is taking action and urged greater disclosure, especially after iSelect's recent float and share price volatility. The ASA has requested a meeting with iSelect to seek more information and an explanation about the August 29 numbers.
In its announcement, iSelect revealed group revenue of $118 million, which was 2.9% below the prospectus forecast of $121.6 million. The company had acknowledged it missed its revenue target in that update.
No. iSelect has stressed that ASIC's document request 'should not be construed as an indication by ASIC that a contravention of the law has occurred.' The company also said it remains of the view that it has fully complied with all regulatory obligations and is cooperating with investigators.
Monitor iSelect's official announcements and any updates from ASIC or the Australian Shareholders Association. Regulatory probes and disclosure questions can affect short-term share price volatility, so staying informed about confirmed company disclosures and regulator statements is important. The article does not provide specific investment advice.
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