The Australian Securities and Investments Commission (ASIC) has begun inquiries into the collapse of Firmus’s proposed $44 billion initial public offering (IPO), following questions about how investor demand was represented during the listing process.
ASIC chair Sarah Court confirmed during a Senate estimates hearing on Thursday that the regulator was examining whether brokers managing the float had overstated investor interest in the AI cloud infrastructure operator.
The proposed listing, which initially targeted a share price of $11, was abandoned after its valuation was revised downwards.
Liberal senator Dave Sharma raised concerns about the conduct of the IPO’s lead managers, including Brisbane-based brokerage Morgans, after institutional investors questioned representations made during the bookbuilding process.
Morgans reportedly informed clients that the offering was oversubscribed before the proposed listing was ultimately cancelled.
Court said ASIC would review the correspondence and assess whether claims about investor demand had a reasonable basis.
The regulator has previously warned that overstating investor interest during an IPO could constitute misleading or deceptive conduct.
ASIC is also examining how potential conflicts of interest were managed, particularly given reports that Morgans held a significant stake in Firmus while acting as one of the float’s lead managers.
Bank of America, JP Morgan and Morgan Stanley were also involved in managing the proposed listing.
However, Court cautioned that the cancellation of an IPO did not necessarily indicate misconduct or a failure of the market.
The collapse also affected Firmus investor Maas Group, which held a significant stake in the company alongside construction contracts linked to its operations. Maas shares fell approximately 20% following news of the cancellation, prompting a trading halt.
In written correspondence to Sharma, Court said ASIC had not identified apparent issues with Maas Group’s continuous disclosure obligations, noting that relevant developments appeared to have been communicated through market announcements and responses to ASX inquiries.
While ASIC has not launched a formal investigation, its preliminary inquiries will focus on the accuracy of information provided to prospective investors and the management of potential conflicts during one of Australia’s most closely watched proposed technology listings.
