04-227 ASIC acts to protect investors in Sydney-based research and development company
Wednesday 14 July 2004
Following an application by the Australian Securities and Investments Commission (ASIC), the voluntary administrators of CMC Power Systems (CMC) have provided undertakings in the Supreme Court of New South Wales to protect investors in CMC.
CMC is a listed company that has raised over $20 million from Australian and overseas investors for a combustion engine technology that it has been trying to develop since the early 1980s.
ASIC initially sought the appointment of a provisional liquidator and to then wind up CMC because of concerns that CMC was insolvent. After ASIC filed its application, the directors of CMC appointed Messrs Martin Green and Peter Krejci as voluntary administrators and trading in its shares has been suspended.
ASIC was also concerned that almost $290,000 raised from investors through a prospectus would not be refunded.
ASIC had been in discussions with CMC about rectifying misstatements and omissions in that prospectus, and the prospectus was subject to interim stop orders during April and June 2004. The voluntary administrators have now indicated that they will no longer be raising funds under that prospectus and that they will refund the funds held by CMC to its investors.
‘ASIC will continue to take steps to protect investors and creditors and to take action to wind-up companies to ensure that they do not operate when they are insolvent’, said Mr Allen Turton, Deputy Executive Director of Enforcement.
The winding up proceedings have now been adjourned to 26 July 2004. If ASIC is of the view that it is in the interests of creditors for a provisional liquidator to be appointed, then it is entitled to seek orders to that effect.
ASIC Website: Printed 02/10/2010
