9 Jun

Reverse Takeovers deliver Bad Beat for 2 Australian Businesses

No Online Gambling for Australian Energy CompaniesIf you’re an entrepreneur in Australia, Perth is a great place to be… unless you’re looking to penetrate the online gambling industry. Two major company executives who were attempting to use reverse takeover tactics to break into the iGaming market have been denied by corporate regulators.

Ranko Matic is the Director of Bentleys and Argosy Minerals, and Non-Executive Director for nearly half a dozen other energy-related businesses. It was revealed this morning that one of his company’s, Celsius Coal, was issued an interim stop order by the Australian Securities and Investments Commission (ASIC), forcing them to cease fund raising efforts towards a reverse takeover of Favourit Global.

The corporate regulator issued the stop order in April, although no specific details as to the reason have been disclosed. Celsius was in the process of a $4 million capital raising effort to complete the reverse takeover of Favourit, a self-described “free socially designed betting website that integrates with a number of licenced betting operator partners where users can place bets.”

Acquiring Favourit Global would have position Mr. Matic’s company to penetrate the online gambling market with great ease and relatively little investment. However, due to the corporate regulator’s cease order, a statement from Celsius this morning confirmed, “The company is in the process of refunding any subscription funds already received to date by our registry.”

Tony Sage, owner of Perth Glory and Executive Chairman of several other energy resource businesses in Australia, ran into a similar roadblock as one of his companies, Fe Limited, a mineral exploration firm, was interrupted in the throes of acquiring Cardinal House Group.

Registered in Australia, Cardinal House Group is a digital entertainment startup trying to break into the B2B and B2C sides of social and real-money online gambling. The company has applied for a licence from Australian gaming regulators, as well as the Norfolk Island Gaming Authority (NIGA).

The latter is the apparent cause of discrepancy from the ASX, which issued Fe a letter explicating their concerns. No explicit details were unveiled, but a response from Fe named Cardinal’s Norfolk Island license application as a cause for concern.

“ASX has advised that they are not satisfied that Fe is able to lawfully conduct its operations in all jurisdictions in which it is proposed to carry on business.” The Australian Securities Exchange, “will not conditionally approve Fe’s reinstatement until the condition is satisfied,” the statement confirmed.

“In reaching this decision, ASX highlighted the uncertainty created by the Australian government’s audit of the Norfolk Island Gaming Authority,” said Fe.

The company relayed its belief that the NIGA license granted to Cardinal House Group was, in fact, valid, claiming “There is insufficient information to justify deferring considering Fe’s reinstatement.” Fe add that it will continue to work with the ASX to expedite reinstatement.

According to Business News Western Australia, Sage’s company was also slapped with a stop order from the ASIC, relating to concerns over “certain disclosures in the company’s prospectus.”