GetSwift under investigation by ASIC, reports massive losses
Written on the 28 February 2018 by Ben Hall
Under fire logistic software company GetSwift (ASX: GSW) has confirmed it has received notice from the Australian Securities and Investments Commission (ASIC) that it is "under investigation" as the company also revealed a blowout in losses of nearly 1,000 per cent.
GetSwift, which is run by executive chairman Bane Hunter (pictured left) and former AFL player and entrepreneur Joel McDonald, is facing up to three separate class action law suits over allegations it has engaged in misleading and deceptive conduct relating to continuous disclosure breaches to the market.
"GetSwift Limited reports that it has been served with a notice to produce documents to ASIC. The company has informed ASIC that it will comply with the notice and fully cooperate so that its investigation may be completed as soon as reasonably possible," the company says in a statement to the ASX.
"The ASIC notice records that it should not be construed as an indication by ASIC that a contravention of the law has occurred nor that it should be a reflection upon any person or identity.
"The company will continue to keep shareholders informed of developments."
In its half yearly update released to the market shortly after the ASIC investigation was announced, the company revealed its net loss after tax had blown out by 964 per cent to $5.5 million from $516,000 in the prior corresponding period.
Law firm Squire Patton Boggs last week applied to commence the class action against GetSwift in the Federal Court, while litigation funder Vannin Capital together with law firm Corrs Chambers Westgarth along with MC Lawyers have said they are also investigating the possibility of launching a class action.
Squire Patton Boggs has alleged GetSwift breached its obligations to the market in announcing deals with The Fruitbox Company, the Commonwealth Bank and Fantastic Furniture, with those deals subsequently either cancelled or subject to ongoing review.
"It is alleged that the exaggerated announcements caused investors to believe that GetSwift had actually secured and commenced generating revenue from substantial clients such as FruitBox, CBA and Fantastic Furniture," Squire Patton Boggs says in a statement.
Ahead of the ASIC investigation and the class action being lodged, GetSwift spent nearly a month in a trading halt as it worked through its disclosure issues with the ASX.
The company says it has been working with PricewaterhouseCoopers (PwC) to review its compliance procedures.
GetSwift's shares have fallen dramatically since it resumed trading just over a week ago. Ahead of the trading halt, GetSwift's shares were trading at $2.92. At around 12.45 AEST on Wednesday, its shares were at $0.61.
Business News Australia
Author: Ben Hall