Getswift fails in bid to reveal ASIC legal costs as shares plunge

Getswift says it will continue to pursue the corporate regulator over its refusal to reveal the cost of its lengthy legal battle with the company founded by former AFL star Joel Macdonald.

Getswift, which has suffered a share price plunge this month after revealing plans to leave the ASX and list in Canada, said it plans to file for a formal review following the Australian Securities and Investments Commission’s refusal to comply with the freedom-of-information request.

GetSwift directors Joel MacDonald  and Bane Hunter have denied they misled the market.
GetSwift directors Joel MacDonald and Bane Hunter have denied they misled the market.Credit:Tom Pietrasik

“GetSwift would like to point out that the lengthy proceedings against it could easily have cost Australian taxpayers – who have gained nothing and may never gain anything from the lawsuit – a significant sum of money,” the company said in a statement.

“If the public disclosure of that sum is embarrassing or ‘prejudicial’ in the context of a taxpayer-funded campaign, then there is even more reason for it to be made public.”


ASIC told the company this week that it considers “the release of information that details ASIC’s costs in the investigation and litigation against Getswift and associated parties would be premature and has the potential to adversely impact upon the adjudication of this matter.”

ASIC declined to comment.

The ASIC legal action alleges Getswift, Mr Macdonald and fellow director Bane Hunter made misleading representations regarding customer contracts to the ASX in 2017, which sent its share price soaring.

Soaring legal expenses were a contributing factor to Getswift’s rising losses last year despite a significant leap in revenue generated by its business, which provides cloud-based last mile delivery logistics for Red Rooster in Australia and Pizza Hut operations across the globe.

Getswift’s financial accounts for the year ending June 30, 2020 reported that legal costs more than doubled to $12.8 million. Its losses rose to $31.1 million last year despite revenue rising ten-fold to $24.5 million from $2.14 million the prior year.

The most significant contributor to the rise in sales was Getswift’s acquisition of a majority stake in Serbian group Logo earlier this year.

Getswift shares have plunged more than 40 per cent since announcing its plans to leave the ASX and relist on Canada’s Neo exchange later this year.

The stock hit a low of 37¢ on Wednesday, less than half what it was worth last month.

Despite the losses, and the prospect of a corporate ban if ASIC’s legal action is successful, Mr Bain and Mr Macdonald had a major windfall last month after the company met key financial performance hurdles.

The duo received share rights worth $15 million at the time, but are now worth less than $8 million.

The ASIC case against Getswift, Mr Macdonald and Mr Bane wraps up at the end of the month.

Getswift has argued in court that the corporate regulator has not proved the information was material.

“[ASIC] equates information being relevant to investors with information being material,” Getswift’s barrister Matthew Darke, SC, told the Federal Court hearing last month as part of the company’s final submission to the court.

John Halley, SC, acting for ASIC, described Getswift’s defence as a “scorched-earth approach” where the company argued that unless every element is established to be material information then the case must fail.

“At the end of the day, it’s a commonsense test … is that information likely to influence an investor,” he told the court.

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