Adelaide-based Astra Resources PLC may have to repay more than $6.5 million of investments after the Federal Court ruled it breached fundraising laws.
Justice Richard White ruled on Monday that Astra Resources and its subsidiary, Astra Consolidated Nominees Pty Ltd, had breached the laws by raising funds without a prospectus or similar disclosure documents, as required by law.
Civil proceedings were brought against Astra Resources by the Australian Securities and Investment Commission in May 2014.
Justice White said that Astra Nominees had breached the law by offering shares to 281 investors, who paid a total of more than $6.5 million for their shares between September 2011 and August 2012.
He said Astra Resources had also breached the law by distributing share application forms to those investors, through its agents or in a number of cases directly itself.
The court will now determine ASIC’s remaining claims against the companies and former directors Jaydeep Biswas, Barrie Meerkin and Silvana De Cianni.
ASIC has made an application to the court for Astra Resources and Astra Nominees to inform affected shareholders – many from South Australia – who may elect to have their share purchase contracts set aside and claim a refund or damages.
ASIC also alleged that the former directors failed to take reasonable steps to prevent the illegal fundraising.
ASIC is seeking orders that they be disqualified from managing corporations.
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