ASIC has released the results of an intensive surveillance of high-yield debentures that was conducted in late 2004.

ASIC examined the prospectuses and selected advertising for debentures issued by 11 companies that were offering high yields, such as interest rates that were four per cent per annum above bank term-deposit rates.

As a result of its surveillance, ASIC prevented four offers that failed to disclose information relevant to the fundraising from proceeding until the defects had been addressed. One of the four prospectuses required a final stop order, which permanently stopped the offer from proceeding.

ASIC also stopped two misleading advertising campaigns, and required companies to improve the information provided to investors in two other cases.

ASIC identified four common concerns that were especially prevalent, namely:

• aggressive or misleading advertising
• poor disclosure about property developments
• related-party transactions, and
• bad and doubtful debts.