Struggling financial group Blue Sky Alternative Investments (ASX: BLA) has entered a trading halt as it awaits a "material transaction" with Californian company Oaktree Capital Management.
The company has requested the trading halt remain in place until the announcement is made or the open of trading on 1 October.
In late July, Blue Sky confirmed it was in discussions to receive a lifeline from Oaktree for a possible investment as part of a strategic review that followed the bearish report from US short seller Glaucus.
After a rough trot that saw Blue Sky's losses triple in FY18 with the hollowing out revenue as pessimistic investors backed away from the company, today it has also provided clarification on breaches under investigation.
In its Annual Report on 30 August, Blue Sky noted three legal and regulatory matters of concern, but it has since been informed that the Australian Securities and Investments Commission (ASIC) does not intend to make any further inquiries into the initial two breaches.
"Blue Sky has now completed its review of the third matter in conjunction with its external legal and accounting advisers," the company said.
"The third breach relates to identified fees or third-party expenses that were allocated to certain Blue Sky closed-end managed funds in a manner inconsistent with arrangements represented in the disclosure documents for those funds."
The group claims the value of those incorrectly charged fees or third-party expenses amounted to $4.1 million plus GST, and the company has started to reimburse the relevant funds in a process that is expected for completion by 31 October.
However, a fourth breach has been confirmed relating to obligations arising from an external custodian, Australian Executor Trustee Limited (AET).
"On 31 August 2018, AET informed its clients that it did not believe it had met net tangible asset (NTA) requirements under its own AFSL [Australian Financial Services Licencee] in June, July and August 2018," Blue Sky said.
"Consequently, Blue Sky was obliged to inform ASIC of this breach on 31 August 2018. AET has subsequently rectified its NTA breach of it AFSL.
The investment fund adds it has so far received no communication from three legal firms that had been advertising for class action participants, and no claim has yet been served.
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