prospectus of Austin Retail Ltd Assignment PDF
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Added on 2021-06-15
prospectus of Austin Retail Ltd Assignment PDF
Added on 2021-06-15
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1The issue in this case is false information has been provided by the prospectus of Austin RetailLtd. particularly in view of the fact that the sales manager of the company, Bob Brown hadsuspected that the advice was incorrect. Still he failed to question the report or to make his owninquiries. At the same time, the liability of DB consultants or the liability of Dendy securitiesLtd. also needs to be examined. At the same time, the rights and remedies available to theinvestors also need to be considered. In this regard, section 710, Corporations Act, 2001 (Cth) mentions that a prospectus for entities’securities should provide all information that is necessary for the investors and the experts toreasonably be an informed evolution of the matter. Therefore the law provides that when acompany is willing to offer shares to the general public, such company can offer securities in theform of shares, debentures and options through an initial public offering (IPO) or 'float'. Suchduties can be offered in the form of listed or unlisted securities. However, in order to fulfill thelegal disclosure requirements and also to inform potential investors where the money is going tobe used by the company, the company is required to issue a prospectus. The corporations actrequires that all the information required by the investors for making an informed decisionshould be provided by the prospectus. However, it is important that the investors should not bedistracted by glossy pictures.1 Therefore it is very important that the investors also to their ownresearch before making the investment and unaware of the fact that where there money is goingto be invested. Therefore, according to the law, the prospectus should provide permission regarding the featuresof the securities that are being presented by the corporation, including how many securities for1Joanna Khoo “Civil Liability for Misstatements in Offer Documents: Striking the RightBalance” (2010) 6 Int'l L. & Mgmt. Rev. 49
2sale, how investors can apply to buy them, permission related with the company and itsoperations, the financial condition of the company as well as the risks related with the offer.Generally the front of the prospectus contains the section known as "investment overview" or"summary". This part contains significant sex related with the company and the offer, includingthe key features of the business of the company, major risks and other financial information. Thissection also tells the investors where they can find more detailed information regarding thesetopics in the prospectus. However, it is recommendable that the investors should read the fullprospectus as it helps in deciding if a particular company is suitable for their investmentobjectives.2In this way, a disclosure document is necessary regarding a specific offer of securities. Thecommon rule in this context is that prospectus should be made regarding the offer, if not forinformation statement can be utilized. However it needs to be granted that the prospectus is theprincipal and most common disclosure text even if there are several varieties of prospectus.3These include full prospectus, short form prospectus and a special prospectus. A full prospectusis required cases where, for example, the company wants the list on a stock exchange. In thisregard, the Corporations Act provides a general disclosure requirement related with fullprospectus according to which the prospectus should carry all information that may bereasonably needed by the depositors and the financial experts for making knowledgeableevaluation of the:-Rights and liabilities related with the securities offered; and2Michael Duffy “‘Fraud on the Market’: Judicial Approaches to Causation and Loss fromSecurities Nondisclosure in the United States, Canada and Australia” (2006) 29 MULR 6213Peter Fitzsimons “New Zealand Securities Commission: The Rise and Fall of a Law Reform Body” (1994) 2 WLR 87
3The assets and liabilities, profits and losses, financial position and performance and theprospects of the body that is going to issue the securities. In this it is necessary that the prospectus contained the above-mentioned information to thedegree that the pertinent persons concerned with the making of the prospectus really know orshould have attained the information by making inquiries. Apart from the general revelationrequirements it is also required by the Corporations Act that there are several specificrequirements related political information that needs to be disclosed. A short form prospectus issimilar to the full prospectus and the only dissimilarity is that a short form prospectusincorporated certain texts that have already been lodged with the ASIC by allusion in theprospectus. Consequently, instead of mentioning all particulars in the prospectus, it merely refersto a document that has been lodged with the ASIC.4 It is necessary that the government isadequately identified by the prospectus and at the same time, sufficient information is alsoprovided regarding the contents of the document which allows a person to decide if it is requiredto acquire a copy of the paper or not.5 A short-term prospectus is generally used for very largedistributions to unsophisticated investors. The law requires that while framing a prospectus, as the general public is invited for takingshares in the company on the faith of the representations made in the prospectus, it is veryimportant that everything mentioned in the prospectus should past through strict and scrupulousevaluation. In this context, the general public is at the mercy of the corporation promoterstherefore nothing should be mentioned in the prospectus as a fact if it is not so. In the same way,no fact should be omitted if the presence of suspects can have any effect on the nature or the4Bolitho v Banksia Securities Ltd [2014] VSC 85Robert Austin and Ian Ramsay Ford’s Principles of Corporations Law (14th ed, LexisNexis, NSW, 2010)
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