Australia’s corporate watchdog says companies and financial advisers need to crack down on information leakage that seems to have been happening ahead of capital raisings.

Share price declines ahead of prospective raisings suggested that information was being leaked and used to lower the value of the stock being offered, Australian Securities and Investments Commission commissioner Belinda Gibson said on Tuesday.

This appeared to be mainly the result of lax treatment of confidential information by companies and their financial advisers, she said.

“ASIC thinks there needs to be more work done on how confidential information is handled,” Ms Gibson said at a corporate finance conference in Sydney.
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Commonwealth Bank of Australia (CBA) has paid a $100,000 fine from the corporate watchdog for an alleged failure to disclose a hike in its 2009 bad debt forecast ahead of a controversial $2 billion capital raising.

CBA on Wednesday said that while it agreed to pay the penalty imposed by the Australian Securities and Investments Commission (ASIC), that payment was not an admission of liability.

Nor could the bank’s agreement to pay be taken as a finding that CBA had contravened the Corporations Act and its continuous disclosure rules.

ASIC had alleged CBA failed to notify the Australian Securities Exchange (ASX) after it became aware that its full year loan impairment expense (LIE) to gross loans and acceptances ratio to June 30, 2009 would rise by a material amount.
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Commonwealth Bank of Australia Ltd (CBA) plans to maintain its cornerstone shareholding in a Chinese bank by paying up to $165 million to take part in its equity raising.

CBA holds 19.99 per cent of Bank of Hangzhou, just below the 20 per cent threshold allowable for a single foreign entity investment under China’s banking regulations.

To maintain its holding CBA will subscribe for 20 per cent of the total number of new shares to be issued by Hangzhou, based in Zhejiang province on China’s eastern seaboard.
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