Two key directors of RGM Media failed to adequately declare that an entity they control disposed of 728,000 shares in the fledgling company just weeks after raising $4 million from investors to list the entertainment company on the Australian Securities Exchange.
RGM Media chief executive Devesh Chetty and director Robyn Gardiner each hold more than 20 per cent of RGM Entertainment which, in turn, held more than 23 per cent of the newly-listed RGM Media in August 2010.
RGM Entertainment transferred 728,000 shares in an off-market trade on August 17, 2010, prompting a disclosure requirement under the ASX Listing Rules (within five business days) and the Corporations Act (within 14 calendar days).
However, the disclosure was made several months later, in March, 2011, prompting a query from the ASX.
RGM Media's chief operating officer Stephen Clark told the ASX that the lack of disclosure was an administrative oversight during a transitional period after the company was listed on the ASX on August 4, 2010.
“The company apologises for this oversight and is now in the process of reviewing its procedures relating to the disclosure of directors interests and is taking steps to ensure that such an error does not occur again in the future,” he wrote.
A spokesman for RGM Media said the trade was a correction of the share allocation originally made to distribute the 50 million shares received as consideration for the reverse takeover of Biosignal Ltd.
On July 29, former listed biotech company Biosignal completed the acquisition of the RGM Media business, consolidating its shares and issuing more than 105.9 million new shares, including 70 million to the vendors of RGM Entertainment.
An ASX review of disclosure of directors’ interest notices during the first quarter of 2010 found that 94.8 per cent (or 2504) of notices were lodged within the five day limit.