The Australian Securities and Investments Commission will scrutinise the conduct of the banks that ran Firmus's abandoned $44 billion listing, its chair has told a parliamentary hearing. Sarah Court said on Thursday that ASIC would look into whether interest in the share sale was misrepresented to investors. She was appearing before a Senate estimates hearing, according to Nine.com.au.
The inquiry follows a letter from NSW Liberal senator David Sharma, who had written to Court raising concerns about the proposed float of the data centre company, valued at $43.7 billion. On Thursday he asked her about correspondence from Morgans to investors that described "huge demand" for the float and told recipients to "get a rattle on" if they wanted a place in the raising.
Court said lead managers are expected to have a sound basis for any claims they make about investor demand, and that this would form part of the regulator's inquiries. "Sometimes things can be pulled out of broader correspondence, but we have got a report that makes clear that lead managers must have a reasonable basis for investor demand. That is one of the things that our inquiries will be examining," she said.
She added that ASIC was reviewing the various issues raised in media coverage, including the appointment of joint lead managers. Court told the hearing she could not say much more at this stage, but described the collapse as a major event that the regulator intended to examine thoroughly. "I almost cannot give much more than sitting here today, suffice to say that this is a very significant event, and we understand that, and we need to look at it very carefully."
Why it matters
The scrutiny lands on the banks and advisers who marketed the listing, not only on Firmus itself. If ASIC finds that demand was overstated, it would raise questions about how capital raisings are promoted to retail investors and about the assurances that underpin them. The watchdog's interest also matters because of the scale involved: a $44 billion float would have been among the largest attempted on the ASX.
The collapse has already spread beyond the company. According to ABC News, the scrapped float has cast doubt on billions of dollars of planned AI data centre construction. iTnews reported that ASIC has been speaking to bankers about the failed initial public offering, while The Australian described the probe as taking in an all-star cast of bankers.
A founder with a history
Firmus was set up in 2019 by Oliver Curtis, his cousin Tim Rosenfield and former brother-in-law Jonathan Levee. Curtis is a previously convicted insider trader and the husband of Sydney publicist Roxy Jacenko, a background that has drawn extra attention to the company's rise.
In early October, Firmus abruptly dropped its plan for a blockbuster listing on the Australian Stock Exchange. The decision came despite the marketing push that is now under the regulator's microscope.
What to watch
ASIC has not set out a timetable or indicated whether it will take any enforcement action. The next signals will come from any further statements from the regulator and from the banks named as joint lead managers, as well as from whether the doubts over AI data centre funding begin to affect other projects.
