ASX wants Dampier to ‘please explain’ why it didn’t tell investors about food deals
Link copied to
Junior explorer Dampier Gold has been quizzed by the ASX over why it did not tell investors about franchise agreements that its food chain subsidiary struck with five different parties.
The Australian bourse wanted to know if Dampier (ASX:DAU) thought agreements secured by Aurigin Foods Franchising would have a material effect on the price or value of its securities, to which the company responded “no”.
“To our knowledge, Aurigin would be one of the few Australian entities seeking to enter the specific market that Aurigin is targeting, so there was and is no benchmark on which to measure future outcomes,” chairman Malcolm Carson said in his response.
“In this context, the signing of franchise agreements simply represents the fact that Aurigin has sourced five parties who are prepared to become franchisees of a conceptual business that has no revenues or operating history whatsoever.”
The five agreements were executed in September and October last year.
Dampier also noted that Aurigin had not secured any supply contracts and no distribution network had been established.
“Without these essential elements, the franchise agreements have no commercial value whatsoever,” Mr Carson said.
Earlier in February, Dampier received shareholders approval to sell its Aurigin Foods business.
The company decided to sell the business because of the uncertainty of success surrounding establishing itself in China, which Dampier says is a “very difficult market for ventures of this kind”.