iSelect investors left in dark over ASIC inquiry
Insurance comparison website iSelect should have disclosed to the market that it was being probed by the corporate regulator, the peak shareholder body says.
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.