Highlighting the importance of compliance and transparency for investors, a corporate governance breach by agriculture company CropLogic (ASX: CLI) has landed them on the ASX watch-list which will see their announcements and activity closely scrutinised by regulators for the foreseeable future.
The situation arose following a private query from the ASX to CropLogic as to their knowledge of Stephen Silver, a CropLogic Director, and his FINRA disciplinary proceedings for unethical practices in the United States between 2015 and 2016.
An email response to the ASX, in which Chairman Steven Wakefield was cc’d, Secretary Susan Hunter wrote, “The Board was not aware of the allegations at the time Mr Silver was appointed as a director. The Board was not, before today, familiar with US based FINRA.”
On September 10, seven days after the CropLogic response, the Company released to market the details of the initial ASX aware query, this time acknowledging they were aware of Mr Silver’s FINRA proceedings at the time of CropLogic’s public listing in 2017. In the same letter, Wakefield did not believe the violations “ to be information that was material to the decision of CLI shareholders to approve the re-election of Mr Silver.”
Citing “inconsistancies”, on September 16, ASX Chief Compliance Officer Kevin Lewis formally notified CropLogic that “the manner in which CropLogic has responded to ASX’s queries [is] unsatisfactory” and that they had been placed on an ASX watch list.
Details surrounding what companies are on the watch list are predominantly kept private by the ASX but once on it, Companies are required to enter a trading halt prior to releasing any market-sensitive announcements, all of which are vetted by the ASX Compliance team before public release.
Since the start of 2019, CropLogic has enjoyed exceptional share price performance rising from $0.015 per share to now trade around $0.06 per share with the Company having recently commenced an investigation into the feasibility of an industrial hemp farm in Australia, leveraging a relationship with an American partner which has been cultivating hemp in Oregon since 2015.