In typical LWP fashion, yesterday’s twin announcements about terminating their business arrangements with Hallmark thus cancelling their only commercial project as well as initiating an independent legal review of the companies undertakings raises more questions than it answers.
Recent announcements confirm that LWP have not acted in line with their continuous disclosure obligations. The termination of their only commercial deal leaves them with no way to produce any proppants having also recently decommissioned their Clontarf pilot plant. LWP raised funds for the Pune plant in 2015 and raised further cash in 2016 with the Lanstead funding arrangement but now find themselves with little cash and facing the prospects of a hefty ATO bill for making a erroneous R&D rebate application.
The numerous breaches of the ASX Listing Rules and the Corporations Act have been well documented so shareholders can only hope that this is a truly independent review. This is independent in the meaning of “free from outside control”, not independent like LWP’s Independent Test Results which were done by their own Chief Scientist.
Although the circumstances leading to the initiation of the legal review remain a mystery, the ASX has had a number of meetings with LWP over their appalling corporate governance record and their complete disregard for the ASX Listing Rules. This also ties in with ASIC’s new Industry funding model where regulated entities wear the cost of investigation instead of the regulator.