This article is from the Australian Property Journal archive
ABC Learning Centres has told the Australian Securities Exchange that it was not aware of margin loan arrangements its directors Eddy and Le Neve Groves held – news that was not welcomed by investors yesterday.
In a please explain query, the ASX asked ABC whether it had knowledge of margin loans arrangements over shares held by the Groves, Le Neve Groves and Martin Kemp the directors of ABC.
And in response, ABC said it only learnt of the margin call arrangements on March 06 when trades were conducted on the shares.
In addition, ABC said it was not aware on February 27 of the “Activation of Trigger” – that is the right of the lenders to sell the shares held by directors.
On February 29, the ASX and the Australian Securities and Investments Commission, issued a warning to companies on their obligation to disclose margin loan arrangements.
But when quizzed by the ASX whether ABC considered the margin arrangements and activation of triggers material to the company and why it was not released to the market – ABC said it was “Not Applicable” because it was not aware of the arrangements until March 06.
“The information related personal financial arrangements of the individuals concerned which was not, and ought not to be, relevant to the company’s business affairs and operations,” ABC said.
The margin calls saw lenders force Groves and Le Neve Groves and two other directors to sell off around $52 million in stock last month.
And on March 6 margin calls forced Kemp to sell off another 2.7 million shares, leaving him with 23,659 ordinary shares.
Investors were clearly unsatisfied with ABC’s explanation, the company’s share price fell 7.5 cents to close at $1.60.
Australian Property Journal