Asset Finance told off for advertising debentures in Oz
New Zealand finance company advertising in Australia gets a warning.
Friday, 19 October 2007
Its warning follows recent advertisements by a New Zealand company, Asset Finance, in the Australian press offering investment opportunities with returns in the range of 9.75% to 12% for debenture stocks.
Although investors were directed to a New Zealand website and could invest via a New Zealand prospectus, a prospectus was not lodged with ASIC and did not, therefore, comply with Australian disclosure requirements.
"Australian investors should take extreme care before investing overseas as they may not be protected by Australian law. If you take up an offer of securities from an overseas entity that has not complied with Australian law or deal directly with an overseas broker, you may lose the protections provided by Australian law," ASIC executive director, consumer protection, Greg Tanzer said.
ASIC has obtained an undertaking from Asset Finance to cease making further offers in Australia other than in full compliance with Australian requirements. ASIC has been informed that in this particular case the offer was unsuccessful and no funds were actually raised in Australia.
Under Australian law, every business that gives investment advice must be licensed by ASIC and companies that offer shares or other securities to the public must issue a prospectus and lodge a copy with ASIC.
"The prospectus is an essential document that tells you what you need to know to assess the risks of an investment including information about the company offering the investment and the investment itself. While it's not a guarantee of performance, you can use the prospectus to make an informed decision about whether or not to invest your money," Tanzer says.
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