The Australian Securities and Investments Commission and the Australian Securities Exchange will investigate the deal between Leighton Holdings and IT entrepreneur Nicholas Bolton that resulted in Bolton voting against his own motion to wind-up BrisConnections, the builder of a $4.9 billion toll road in Brisbane.
Bolton, who is the biggest shareholder in BrisConnections, forced a shareholder vote to try to wind the company up in order to avoid $154 million in instalment payments on his shareholding.
But on the day of the vote it was revealved Bolton had sold his voting rights to Leighton for $4.5 million. Leighton used Bolton's votes to defeat the wind-up motion and keep the toll road project alive.
Bolton has denied accusations of greenmail, a process by which an investor takes a minority stake in a company, and agitates for change in order to force the company to buy them out. He says he still owes $154 million on his shares and will continue to work for unit holders.
But ASIC is believed to be investigating the circumstances surrounding Bolton's deal with Leighton deal and the greenmail accusations.
"We are looking into the events that unfolded at Tuesday's meeting in Brisbane. We have watched for some time and with some interest the events that have unfolded in this matter, and will now examine what happened and why it happened," and ASIC spokesperson told The Age.
According to The Australian, the ASX will also examine the deal to establish whether continuous disclosure obligations had been met.
It has also been revealed that a company owned by Bolton, domain name sales company Bottle Domains, has been stripped of its licence to register domain names by the Australian Domain Name Administrator (auDA) after it allegedly failed to notify users of a security breach.
auDA claims Bottle Domains failed to notify it of a security incident in April 2007. It has been reported that this security breach led to an incident in January this year when the personal account detail (including credit card numbers) of Bottle Domain customers were posted for sale online by a computer hacker.
auDA also claims Bottle Domains did not reset customer passwords or alert its customers to the possibility that their account information had been accessed following the incident in April 2007. It says Bottle Domains also "failed to conduct an independent security audit to verify that the security vulnerability had been fixed, and that there was no other unauthorised access to its systems".
"auDA takes security issues very seriously," auDA chief executive Chris Disspain said in a statement.
"In our view, Bottle Domains's failure to deal properly with the security incident in April 2007 demonstrated an alarming disregard of the potential risks to its own customers, and to the overall stability and integrity of the Australian DNS" (domain name system).
"Given the seriousness of the matter, it is appropriate that auDA terminate Bottle Domains's registrar accreditation."
Bolton plans to contest auDA's decision.
Related stories:
- Bolton defends BrisConnections backflip
- BrisConnections wind-up vote fails after rebel shareholder sells out
- Gen-Y internet entrepreneur takes on banks over toll road fiasco
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