ASX hopeful Bitcoin Group has delayed its listing after running into trouble with the corporate watchdog over claims Prime Minister Malcolm Turnbull is a shareholder and “misstatements” about the company’s profitability.
Bitcoin, which counts former St Kilda president and former NewSat director Andrew Plympton as its chairman, has also admitted statements in the press in September about its revenue that had “no reasonable basis”.
The company’s four-page supplementary prospectus also outlines how the company plans to deal with the money it raised from investors through an entity established in the Cayman Islands through Bnk to the Future Limited in a crowd-funding program. Bitcoin also gives notice that it has a related-party investor in the IPO – the father of the company’s chief executive Sam Lee.
Mr Lee said the company had hired talented lawyers to help it steer through the IPO process.
“Being pioneers in a new industry, we greatly appreciate the continued dialogue ASIC has extended to us so that we can address their concerns,” Mr Lee said.
Bitcoin Group’s admissions have led to the company postponing its planned listing date to December 11 to allow would-be investors to digest the news.
Bitcoin Group, which is seeking to raise $20 million through its IPO, uses complex mathematical equations to verify transactions between bitcoin traders.
The digital-currency company, or bitcoin miner, has generated significant buzz ahead of its listing, which has endured several setbacks, including two stop orders issued by the Australian Securities and Investment Commission, since first applying for a listing in June this year.
Bitcoin Group garnered much press when the company was cited by Mr Turnbull at the launch of share-purchasing app On-Mark Bookbuild during a demonstration by the Prime Minister on how to purchase shares through the app.
The same day as the launch, October 7, Bitcoin Group published an article on Wechat – a popular messaging service in China – that implied Mr Turnbull had bid for shares in the Bitcoin IPO, according to the company’s supplementary prospectus.
“Bitcoin retracts any suggestion that Mr Turnbull personally invested in the Bitcoin Group IPO.”
The company has also admitted another article published on Wechat included “misstatements” about the company’s profitability that were “potentially misleading and based on calculations contained in a draft prospectus not lodged with ASIC or available to the public”.
The article also “provided profit calculations and operating-cost estimates which did not reflect the profit and costs details contained in the replacement prospectus”, and made statements about “auditing costs” despite Bitcoin’s accounts being not audited.
Mr Lee said the profit had been overstated by $30,000 and the company had sought to clarify that Mr Turnbull was not an investor in the float “to ensure Chinese journalists accurately interpretted the On-Mark Bookbuild launch event”.
The company has also corrected statements made in Fairfax Media in September about the company’s upcoming float that specifically referred to Bitcoin’s projected revenue forecasts, which were based upon a range of Bitcoin values recorded between June 2015 and June 2016.
This was despite the forecasts not being included in Bitcoin’s replacement prospectus, the company admitted.
“The projected revenue forecasts in the SMH article had no reasonable basis to be made,” it said.
Bitcoin has also pledged to ensure any purchasers of the company’s shares through its Cayman Islands portion of the offer are not Australian residents, and that no single investor through its Caribbean bookbuild holds no more than 4.9 per cent of Bitcoin’s shares as stipulated in the Corporations Act.