5G Networks Limited (ASX: 5GN) is a telecommunication company, engaged in data networking and provides cloud and hosting services along with managed services.
On 9 May 2019, 5G Networks Limited announced that it had made an application to the Federal Court of Australia, with regards to, relief under s1322 of the Corporations Act for validating on-sales of shares issued in the placement made to professional and sophisticated investors on 12 April 2019. Post which the company’s securities were suspended from trading on ASX for the release of an announcement and a copy of appropriate court orders regarding its application to Federal Court of Australia.
The application was supposed to be heard on 10 May 2019 by the Federal Court of Australia, 305 William Street Melbourne before Justice Davies.
In the court hearing dated 10 May 2019, before Justice Davies, the court orders pursuant to section 1322(4)(a) of the Corporations Act 2001 that any offer for sale or sale of the quoted securities being 10,000,000 shares in the plaintiff after the date of issue on 12 April 2019 until 8 May 2019 is not invalid. This is so because the company failed to issue a valid cleansing notice under s 708A of the Corporations Act to exempt the sellers from the obligation of disclosure under the Corporations Act. Secondly, the consequent failure of sellers to comply with section 707(3), as well as section 727(1) of the Corporations Act.
Based on section 1322(4)(c) of the Corporations Act, the above-mentioned sellers of the securities are relieved from the civil liability that arises out of a contravention of s 707(3) and section s 727(1) of the Corporations Act.
A sealed copy of the orders passed by the court will be served to the ASIC, as well as ASX limited as soon as practicable. Further, the orders passed by the Federal court need to include on the database of ASIC.
Each of the person mentioned above will be given a sealed copy of these orders to whom the securities were issued.
The orders from the court also stated that the plaintiff would be publishing an announcement to the ASX, which includes a copy of these orders and even place a copy of these orders on its website for at least 28 days.
Further, on 10 May 2019, the company released a cleansing notice, wherein it advised that it has issued 40,000 fully paid ordinary shares, effective 7 May 2019, on the exercise of unlisted options without disclosing it to investors. The issue price of each share of 5GN was $0.60 per share expiring on 23 November 2023.
After the release of an announcement on the outcome of the company’s application to the Federal Court of Australia regarding the secondary sales in its securities, the shares of 5GN started trading on ASX on 10 May 2019.
In the previous six months, the shares of 5GN had generated an outstanding return of 153.01%. The stock of the company is currently trading at A$1.000 (as on 13 May 2019, 12:50 PM AEST), down by 4.762%. 5G Networks holds a market capitalization of A$66.63 million and approximately 63.46 million outstanding shares.
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