Australia’s corporate regulator on Friday defended its actions in allowing the initial public offering of Macquarie Group-backed software provider Nuix last year, despite a law firm flagging concerns with its prospectus.
Australian Securities and Investments Commission (ASIC) executives told lawmakers accusing it of not undertaking proper due diligence even after issues with the prospectus were raised, that the prospectus contents and disclosures were not its responsibility but that of company directors.
The grilling came after shares in Nuix, which sells forensic data analytics software and listed in December at $5.21 a share, fell to trade at less than half the IPO price after the company twice downgraded revenue forecasts published in its prospectus.
The shares were 3.1 percent lower on Friday afternoon at $2.68.
The regulator said that days after Nuix filed its prospectus on November 18, ASIC received three complaint letters from a law firm on behalf of an anonymous client questioning the company’s revenue recognition restatements in its accounts.
“The Nuix prospectus was reviewed by a specialist team at ASIC,” Chair Joe Longo told lawmakers at a regular parliamentary committee hearing in Canberra.
“We considered the complaint and requested further information from the company (and) based on the response ASIC received, it did not appear that the prospectus was misleading or deceptive or contained any material omissions,” he said.
“ASIC’s reviews are limited to disclosure. We may intervene if we believe a document makes material misleading statements or omits information that is required for an investor to make an informed investment decision.”
Longo said ASIC was well aware of market concerns and was conducting a review of the Nuix IPO.
Partly-owned by Macquarie Group, which still owns close to a third of the company, Nuix was the country’s second-largest IPO last year raising $953 million.
On Tuesday, Nuix said its chief executive officer Rod Vawdrey and chief financial officer Stephan Doyle would depart.