Securities Com Accepts Enforceable Undertakings
Securities Commission Accepts Enforceable Undertakings by LDC Investments Limited
The Securities Commission has accepted enforceable undertakings from LDC Investments Limited and its directors, Mr David G Miller and Mr Kevin Elliot.
Debt securities were offered by the company without a registered prospectus or investment statement, and without a trustee. LDC Investments approached the Commission when it became aware that its fundraising activities may have breached securities law.
LDC Investments ceased offering debt securities to the public once it became aware of the breach. LDC Investments has established a new company, LDC Finance Limited, which has taken over its finance activities. LDC Finance has now appointed a trustee, executed a trust deed and registered a prospectus in respect of its fundraising activities.
LDC Investments has informed investors that the securities were allotted in possible breach of the Securities Act 1978, and has advised them of their rights under the law.
The company has also offered investors the choice of having their original subscription refunded (together with interest, if applicable), or reinvested in the new securities offered by LDC Finance.
LDC Investments has undertaken to refund the original subscription (together with interest, if applicable) to those investors who do not choose to invest in the new securities offered by LDC Finance or who have not informed LDC Investments of their choice. The company has also undertaken not to offer or allot further securities to the public for subscription other than in accordance with the Securities Act 1978.
“This highlights yet again that companies who seek to raise money from the public need to be fully aware of their obligations under securities law,” Commission Chairman, Jane Diplock, said.
“As LDC Investments took the initiative to remedy the breaches once it became aware of them, we think that in this instance an enforceable undertaking is an appropriate outcome.”
LDC Investments is the seventh company to have offered enforceable undertakings to the Securities Commission during the 2004 year.
The full text of the undertakings by LDC Investments can be viewed on the Commission’s website: www.sec-com.govt.nz.