ZYL Ltd Fined for Continuous Disclosure Breaches
September 23, 2013 4:18 PM EST
ZYL Limited (ZYL), an ASX-listed metallurgical coal exploration and development company, has paid a total penalty of $66,000 after the Australian Securities & Investment Commission (ASIC) served two infringement notices on the company for failing to comply with its continuous disclosure obligations. The infringement notices pertain to an ASIC investigation into ZYL announcements on the Australian Stock Exchange (ASX).
ZYL paid the penalties on Sept 9, in compliance with the two infringement notices.
However, the Corporations Act, under which ZYL paid the penalties, provides that compliance with such notices is not an admission of guilt or liability.
In a press release issued on Friday, ASIC Commissioner Greg Tanzer said that ASIC's issuing of infringement notices is a timely and efficient remedy for dealing with breaches of continuous disclosure laws and an effective way to maintain confidence in the integrity of the market.
"Compliance with continuous disclosure provisions goes to the heart of ASIC's priority of promoting fair and efficient markets, and we take a breach of these laws seriously," Mr Tanzer said.
"All listed companies should have procedures in place to ensure that they comply with their continuous disclosure requirements."
The first infringement notice pertains to the $2 million bridging facility in the 35-month term $18 million convertible note agreement between ZYL and Prestige Glory Limited (Prestige Glory), announced to ASX on Sept 10, 2012.
ASIC found that from Oct 24, 2012, when ZYL announced the drawdown of the bridging facility, that the company was aware that the bridging facility was repayable on: the earlier of either Dec 31, 2012 or the date that ZYL issues convertible notes to Prestige Glory, or such other date agreed by ZYL and Prestige Glory.
However, from Oct 24 to Nov 29, 2012, when ZYL released a replacement annual report, it referred to the earlier repayment date of Dec 31, 2012 which ASIC alleged was in breach of section 674(2) of the Corporations Act 2001 (Corporations Act).
The second infringement notice related to confirmation of change in reserves at a mining ratification workshop.
On Nov 5, 2012, ZYL announced technical studies which highlighted a lower-than-expected conversion from resources to reserves within the Badger Study Area. The Badger Study Area is part of a geographical area known as the Mbila Project area, which in 2012 was a key asset of ZYL in its business plan.
The Nov 5 announcement also referred to a technical workshop which would be conducted that week to examine detailed mine scheduling and its impact on reserves contained within the Badger Study Area.
ASIC found that on Nov 14, 2012, ZYL became aware of the following information, that the 'Mbila mining ratification workshop' held on Nov 8, confirmed a lower-than-expected conversion from resources to reserves within the Badger Study Area, and the proven reserves of anthracite in the Beaufort and Ecca Seams of the Mbila Project were 1,393,000 tonnes and not 7,679,000 tonnes as indicated by Badger Mining & Consulting.
ZYL made an announcement on Jan 4, 2013 which stated that 'the technical workshop had been conducted and confirmed ZYL's concern as disclosed in the announcement of Nov 5.
However, on Jun 24, 2013, ZYL announced that it was no longer proceeding with the acquisition of the Mbila Project.
ASIC alleged that by failing to inform the ASX of these developments during this period, ZYL was again in breach of section 674(2) of the Corporations Act.
The press note said further details of the two infringement notices will be published in the ASIC Gazette.
However, considering the clause that payment of the penalties in compliance with such notices is not an admission of guilt or liability, the release said, ZYL is not, by reason of its compliance with the infringement notices, regarded as having contravened s674(2) of the Corporations Act.
Most Popular Slideshows
- Flight MH17 Attack: Russians Claim 'Putin A Terrorist,' Memorial at Dutch Embassy Overflows [PHOTOS]
- Typhoon Rammasun Claims 18 Lives in China, Incurs $4.32B Losses (PHOTOS)
- Ellen DeGeneres Caught Cheating with Mutual Friend Before Portia de Rossi’s Rehab – Reports [PHOTOS]
- Malaysia Airlines MH17: Vital Black Boxes Finally Land in Hands of Malaysian Authorities, Rebels Announce Ceasefire (PHOTOS/VIDEOS)
Join the Conversation
- China Military PLA Drills Affect Flights, Hundreds Cancelled
- Malaysia Airlines MH17: EU Feared Won't Ever Enforce Sanctions on Russia; All Talk, No Force
- U.S. Flights to Israel Now Lifted, Flights To and From Tel Aviv Resume – FAA
- Reserve Bank of New Zealand Raises Interest Rates Due to 'Unsustainable' Kiwi
- Embattled Malaysia Airlines Could Run Out of Cash 2015; Diverts Plane Over Another War Zone After MH17 Crash
- Samsung Galaxy Note 4 Apps Leak Online, Five Fresh Features to Expect from the Android Smartphone
- Moto 360 Price Speculations, Key Features, Strategic Release Date, Design: A Watch That is More Than Just Time
- Windows Phone 8.1 Update Rollout: 20 Nokia Lumia Phones Eligible and 13 New Features to be Added
- Three New Moto G Successors Spotted in FCC Document Dubbed Moto G2, Moto M and More --Reports
- HTC Google Nexus 8 Release Date Imminent with New Nexus 7 Deals, Two New Tablets Soon
- iPad Air 2 Release Date Will Skip IGZO Panel; To Rollout with Super-Slim iPad Mini Air
- Upcoming iPad Mini 3 Could be 30% Thinner and Likely be Called iPad Mini Air; Apple Q3 Results Show 9% Decrease in iPad Sales