ASIC finally got around to doing the right thing and stopping the
outrageous “free'”options issue to the three executive board members
who make up the board of speculative miner, Australian Mining

ASIC’s move to injunct the company to prevent proposals to issue up to
ten million options to the trio, including chairman Wayne McCrae, who
would have received seven million options, forced AMI to defer the
proposal until at least 25 August.

The objectionable thing about the issue is that they were valued at 50c
and were set when the price of the company’s shares was 31.5c on 29
May. Five or six weeks later the shares went for a big run on an
unverified report, comments from McMCrae to The Australian and a
friendly report from a Sydney financial consultants (Martin Place Securities).
Up go the shares to $10 before falling back to $7.11 when the company asked for
a trading halt before it was to issue a new report on Rocklands.

now been promised three times without success and it seems the ASX is having it
independently checked, which got The Australianinto a bit of a lather this
. Note
the use of the word “ominous” in the story: what does that

from the paper that has done more to spruik this
company without any scepticism, that’s a bit rich. So was The
‘s editorial on the story today entitled “Bonanza or bust”. The
editorial is sub-titled “More
oversight needed to protect investors and the economy”turn it up, Oz!

I would
have thought the original problems lay with the company, Mr McCrae and with The
: not ASIC and the ASX.

McCrae played favourites with the media, talking to
The Australian and ignoring the likes of the more sceptical Sydney Morning Herald.

ASIC moved because the company and Mr McCrae couldn’t see the inadvisability of continuing with the
meeting and the options proposal when there was little information available,
and the options would cost the company millions of dollars in write-offs. That’s also why the ASX is having the Rocklands
update vetted.

certainly saw nothing wrong with the proposed issue or the cost to
AIM and its other shareholders. Far
from it being “ominous” and a poor oversight, ASIC’s actions
and those of the ASX should be bog standard practice in cases like

It’s a
pity The Australian didn’t remark on its role in boosting the shares last week:
perhaps that’s what we should be protected against.

Peter Fray

Get your first 12 weeks of Crikey for $12.

Without subscribers, Crikey can’t do what it does. Fortunately, our support base is growing.

Every day, Crikey aims to bring new and challenging insights into politics, business, national affairs, media and society. We lift up the rocks that other news media largely ignore. Without your support, more of those rocks – and the secrets beneath them — will remain lodged in the dirt.

Join today and get your first 12 weeks of Crikey for just $12.


Peter Fray
Editor-in-chief of Crikey