Court clears 123 different QBL share issues for trading
QBL’s re-entry to the ASX may be back on track, after the Federal Court said 123 separate share issues over six years weren’t invalid.
The company (ASX:QBL) has had to push back its return to market as ‘Cann Global’ three times, to December 7, after revealing that millions of shares issued between July 2013 and May 2018 needed court approval for secondary trading.
The Corporations Act allows small scale shares to be issued without disclosure, such as through a prospectus, but if the person who receives the shares wants to sell within 12 months a disclosure must be made.
It’s to avoid situations such as where a placement is made to a professional investor without disclosure and that stock is quickly offloaded into the market to retail investors who didn’t know new stock had been issued, according to law firm Steinepreis Paganin.
Not making those declarations — or ‘cleansing’ the shares of any restrictions — can mean suspension from the ASX potentially for long periods of time.
The Federal Court in Western Australia issued an order that trading in those shares were not invalid just because the sellers had failed to issue disclosure notices as per the Corporations Act.
It also issued an order cleansing securities that were issued or sold without disclosure notices, so they can be freely tradeable.
The company has been suspended from trading since July 30 while it seeks to recomply with ASX rules, as it switches from bauxite explorer to cannabis company.