The Australian Securities and Investments Commission (ASIC) has commenced proceedings in the Federal Court of Australia against GetSwift Limited and two of its directors, alleging the software-as-a-service (SaaS) company made misleading announcements regarding client agreements.
It is alleged that GetSwift Ltd -- the holding company that owns Australian-founded startup GetSwift -- made a series of announcements on the Australian Securities Exchange (ASX) between February 2017 and December 2017 relating to agreements with clients for the use of the company's SaaS platform that were misleading.
ASIC also claimed GetSwift failed to notify the ASX of material information in relation to those client agreements.
In addition, the regulator contended that two of the company's directors, Bane Hunter and Joel Macdonald, were either involved in the failure of GetSwift to meet its obligations or failed to discharge their duties to GetSwift with the "requisite degree of care and diligence that a reasonable person in their respective positions would exercise".
With the matter set down for a case management hearing on March 1, 2019, ASIC is specifically seeking: Declarations that GetSwift, Hunter, and Macdonald had contravened provisions of the Corporations Act; orders that the three parties pay penalties to the Commonwealth; and that Hunter and Macdonald be prohibited from managing a corporation for a period that the Court thinks is appropriate.
In a statement issued to the ASX on February 28, GetSwift said ASIC had served the company with a notice to produce documents and that the company would fully comply with that notice and ASIC's investigations.
The company on Monday said that since then, GetSwift has cooperated fully with ASIC in relation to its investigations, noting that it had not been given prior notice of ASIC's decision to commence proceedings.
"The company, Mr Macdonald, and Mr Hunter irrefutably deny the allegations made by ASIC and, collectively, will vigorously defend the proceedings," the company told shareholders.
GetSwift opened up its initial public offering in October 2016, issuing 25 million shares at AU$0.20, bringing the total amount raised to AU$5 million.
At the time, Hunter told ZDNet that there were a handful of reasons for GetSwift choosing to become a publicly-listed company. The first, he said, was to provide full transparency to existing and prospective customers.
"What has always held us back to some extent was the due diligence process when interacting with large enterprises, especially as a startup. They do due diligence on companies, products, and people," Hunter told ZDNet.
"We thought the easiest way to provide full transparency is by being a public company. Any questions [prospects] have in regards to viability will be answered."
GetSwift was founded in 2015 by three Australian footballers Macdonald, Rohan Bail, and James Strauss. Prior to GetSwift, the trio had founded a liquor delivery service called Liquorun, but decided to abandon the front end of the service and focus on the logistics management platform behind it. The logistics management platform then became the standalone entity GetSwift.
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