Shares in embattled tech company GetSwift remain suspended after a number of allegations around the company’s disclosure practices led the Australian Securities Exchange to question the startup and halt trading.
In a response to a number of questions levelled at the company by the ASX, GetSwift released a market update last Friday, clarifying previous announcements about partnerships with Commonwealth Bank and Fantastic Furniture, among others, but revealing it could not confirm it was compliant with the ASX’s listing rule 3.1.
Rule 3.1 states once a company becomes aware of any information “a reasonable person would expect to have a material effect on the price or value” of the company’s securities the company must immediately inform the ASX.
However, in GetSwift’s market update, the company stated it was “not in a position to confirm compliance with listing rule 3.1” until after the completion of an ongoing compliance review undertaken by PricewaterhouseCoopers. Due to this, it is likely the shares will remain in voluntary suspension until February 19.
The company also confirmed a report by the Wall Street Journal that it was fielding international takeover offers, stating it had appointed a US-based legal firm and was seeking to appoint a US-based investment bank to “evaluate any potential proposals”. However, the company also confirmed it was yet to receive any offers.
GetSwift was founded in 2014 by ex-AFL footballer Joel MacDonald, and seemingly went from strength to strength before listing on the ASX in October 2016. Since then the company has raised over $100 million in capital, but has had its shares suspended twice in relation to market disclosures.
Then in January this year, an investigation by Fairfax revealed the company had allegedly lost significant contracts with Australian businesses and failed to update the market. These contracts included ones with Fantastic Furniture, The Fruit Box Group, and Commonwealth Bank, with the arrangements with Fantastic and Fruit Box not continuing beyond trial periods.
However, the company defended its disclosure practices in its latest market update, saying due to GetSwift’s pay-as-you-go business model, investors should have been aware the trials could be cut at any point.
“GetSwift did not consider including the qualification that Fruit Box could cease using the platform at any time because that is self-evident of a pay-as-you-go business model,” the company said.
However, it did concede the announcement would have been more clear if “the existence of a trial period had been included”.