The West

The corporate watchdog has issued a warning on backdoor tech listings, which has become a new trend as the mining sector cools.
The corporate watchdog has issued a warning on backdoor tech listings, which has become a new trend as the mining sector cools.

The corporate regulator is warning investors to be more vigilant amid the increasing use of cash-strapped exploration companies to backdoor list technology and biotech projects.

The Australian Securities and Investments Commission (ASIC) says its concerns around the trend are reminiscent of those that surfaced during the technology boom a decade ago.

In a number of cases, the business being backed into the exploration shell has not disclosed audited financial accounts, the valuation is based on illiquid shares in the target company or there is insufficient disclosure around future plans and funding, it says.

"We simply want shareholders to be completed informed about what's going on," ASIC commissioner Cathie Armour told a briefing in Perth today.

ASIC's Perth office has already intervened in one-quarter of the 14 exploration companies changing tack via backdoor listings recently. At least another 20 WA companies are believed to be looking at following suit.

The commission has also flagged increased scrutiny of independent expert's reports, with expert independence among the issues.

The West Australian

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