ASIC swoops on GetSwift with civil proceedings

ASIC swoops on GetSwift with civil proceedings

GetSwift (ASX: GSW) and its directors Bane Hunter and Joel Macdonald are once again in the firing line.

The Australian Securities and Investment Commission (ASIC) has today launched civil proceedings against GetSwift in the Federal Court of Australia in Melbourne.

The proceedings relate to a series of ASX announcements made by GetSwift between February and December 2017 relating to agreements with clients for the use of the company's software-as-a-service platform.

The watchdog is alleging that the company made representations that were misleading, and that Hunter and Macdonald were either involved in the failure of GetSwift to meets its obligations and failed to discharge their directors' duties.

It's been 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.

ASIC is seeking declarations from the court that the Corporations Act was contravened, penalties, and a ban over Macdonald and Hunter from managing a company for a period of time.

GetSwift says that it irrefutably denies the allegations made by ASIC and will virorously defend the proceedings.

The matter will be heard on 1 March 2019 in the Federal Court.

GetSwift was 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, however only the class action from Phi Finney McDonald was given the green light to go ahead.

The company confirmed in February 2018 it received notice from ASIC that it was "under investigation" as the company revealed a blowout in losses of nearly 1,000 per cent.

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.

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 announcement form ASIC has once again plunged GetSwift's shares even further down. They are currently trading down 34.09 per cent to $0.29 per share at 11.57am AEDT.

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