ASIC has announced it will be taking civil action against UK-based mining company Astra Resources and its directors after allegations that the company illegally raised more than $7.6 million from 300 Australian investors.
The illegal activity took place between September 2011 to September 2012.
ASIC’s civil proceedings in the Federal Court of Australia are against Astra Resources, and its directors, Jaydeep Biswas and Silvana De Cianni, and former director Barrie Meerkin.
Astra Resources subsidiary, Astra Consolidated Nominees (Astra Nominees), is also facing legal action.
ASIC is seeking declarations of contravention against the companies and disqualification orders against Biswas and Meerkin, both of Brisbane, as well as Adelaide-based De Cianni.
It is alleged Astra Nominees made offers of Astra Resources shares while Astra Resources distributed share application forms to investors.
ASIC alleges that funds were raised from investors in Australia in breach of the Corporations Act 2001, which requires a prospectus or disclosure document to be provided to investors so that they have all the information they need to make an informed decision about whether or not to purchase shares.
ASIC alleges the three directors failed to take reasonable steps as was their duty to prevent the illegal fundraising.
ASIC is seeking orders to have Astra Resources and Astra Nominees inform affected shareholders that they may elect to have the share purchase contracts set aside and claim a refund or damages.
The proceedings are listed for a directions hearing in the Federal Court in Adelaide on 3 June 2014.