The remarkable rise of Fifth Element Resources has come to a screeching halt after the Australian Securities Exchange suspended trading in the company's shares "pending a review of the company's satisfaction of conditions for admission to the official list".
The move comes a day after WestBusiness asked detailed questions of the ASX as to whether Fifth Element was in compliance with listing rules covering the minimum number of shareholders necessary to "ensure that there is an orderly and liquid market in its securities".
Fifth Element was floated at 20ï¿½ in late May, planning to explore four tenements in the mid-west of NSW.
Although the company is yet to release any operational update since listing, it has enjoyed a meteoric rise since its float, last trading at $7.96 on Monday before the ASX stepped in. At that share price, the company has a market capitalisation of $329 million.
Since listing, the company has received six so-called "speeding tickets" from the exchange, in each case denying any knowledge of the reason behind its extraordinary rise.
Aside from several large exchanges of shares, on most trading days only a handful of Fifth Element shares were exchanged.
Curiously the company failed to disclose its top twenty holders and spread of shareholding on listing. A July 3 disclosure of the figures appears to show Fifth Element has only 13 shareholders.
ASX listing rules require an initial public offering to have at least 300 shareholders where 50 per cent of shares are held by related parties, or 400 shareholders where 75 per cent of shares are held by related parties.
Companies are also required to maintain a wide spread of shareholders after listing.
Yesterday WestBusiness asked the ASX whether Fifth Element met the spread requirement on its listing date, whether the company was in compliance with listing rules concerning its spread of shareholders, and whether the ASX is of the view the trading in Fifth Element shares can be said to be "orderly and liquid" given the extraordinary trading patterns over the last two months.
This morning the ASX suspended trading in Fifth Element shares.
In response to WestBusiness' questions, an ASX spokesman said the exchange could not make any comment as the matter was "currently under review".