ASIC has claimed a scalp in the wake of G8 Education’s failed 2015 takeover bid for Affinity
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Former lawyer Mary-Anne Graves has pled guilty to a charges in connection with G8 Education’s failed 2015 takeover bid for Affinity Education Group.
Graves pleaded guilty to giving one count of false or misleading information to ASIC in 2016.
It forms part of an ASIC investigation into G8’s attempt to take control of the then-listed Affinity via a hostile takeover in July 2015.
Following the first bid in early July that year, other entities with alleged links to former G8 Education chair Jenny Hutson began buying shares in Affinity.
In April last year, Hutson was charged by ASIC with 15 counts of giving false and misleading information.
ASIC’s investigation “included enquiries into alleged undisclosed arrangements between G8 Education and West Bridge Holdings Pty Ltd (West Bridge) for the acquisition of Affinity shares as part of the takeover bid”.
Graves’ charge concerned a false denial under oath that she hadn’t been provided with any information about the acquisition of Affinity shares by West Bridge.
The regulator said on the website that the matter has now been scheduled for sentencing on May 24.
In addition to today’s announcement, ASIC released a separate statement saying new legislation will soon give it the power to pursue harsher civil and criminal penalties for corporate executives who break the law.
Civil penalties will increase to $1.05 million, while the maximum prison sentence for serious criminal breaches of corporate law will increase to 15 years.
Affinity is an early education provider which was previously listed on the ASX, with a portfolio of 160 childcare centres.
West Bridge Holdings Pty Ltd was only set up in mid-July 2015 — after G8 Education’s first takeover offer for Affinity.
It was alleged that West Bridge and another company with ties to Ms Hutson quickly built up a significant stake in Affinity shares.
According to the SMH, an investigation by the Takeovers Panel subsequently found that those transactions hadn’t been properly declared.
Private equity group Anchorage capital then launched a $208 million takeover bid for Affinity at a premium to the G8 offer.
Some Affinity shareholders chose to accept the cheaper G8 offer, which prompted a complaint by Affinity to the Takeovers Panel.
It was then revealed that companies with links to Ms Hutson had purchased shares in Affinity without declaring their connection.
G8 was ordered to sell its shares in Affinity and pull out of the deal, and Anchorage eventually won control of the company and took it private.