Anteo Diagnostics - The need for good governance
Anteo technologies has just released a correction to their Annual report,which had various inconsistencies and omissions.
Two of them being, not notifying the director Rolf Sickman and the ceo Jef Vangenetchen share holdings in the company.
Considering these 2 men are specific creditors to the Anteo company to the tune of approx 18 million aud, and that these men were given ADO shares in lieu of some interest payable to them, you would have thought this information would be critical to Good Governance.
Now, to add insult to injury, Anteo release a dubious Corporate Governance 4G statement to the market.
In the section under Principle 7 Recognise and manage Risk (page 18), Anteo admits that " The Company has not fully adopted the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations (3rd edition) insofar as they relate to the composition and membership of an audit committee. "
And they explain the structure of their Audit committee here
https://anteodx.com/wp-content/uploads/2015/09/Audit-Risk-Committee-24082015.pdf.
Here is Principle 4 from ASX guidelines and principles.
http://www.asx.com.au/documents/asx-compliance/cgc-principles-and-recommendations-3rd-edn.pdf
Principle 4 - Safeguard integrity in financial reporting Companies should have a structure to independently verify and safeguard the integrity of their financial reporting. • Recommendation 4.1: The board should establish an audit committee. • Recommendation 4.2: The audit committee should be structured so that it: • consists only of non-executive directors • consists of a majority of independent directors • is chaired by an independent chair, who is not chair of the board • has at least three members. • Recommendation 4.3: The audit committee should have a formal charter. • Recommendation 4.4: Companies should provide the information indicated in the Guide to reporting on Principle 4.
Anteo explain - " Company has determined that the above membership structure is adequate to verify and safeguard the integrity of the Company’s financial reporting and to carry out this Charter given the qualifications, experience and financial acumen of the current members."
So instead of having at least 3 members in the audit committee, and the Chair being a independent non executive director, we have only 2 members, Ms Sam Anderson and Mr Richard Martin .
Now, Ms Anderson who in this notice,
http://www.asx.com.au/asxpdf/20160825/pdf/439mv8drbslm36.pdf announced her departure from the board and her position as chief of the audit committee and the other, Mr Richard Martin, who is on the board of the major share holder First Cape management and anything but independent, was designated Chief of the Audit committee in the Annual report.
So now, we have only 1 member of the Audit committee and who is a director on the board of the major shareholder,as well as former chief Financial officer and executive director of the Board Of Anteo technologies.
How, can this be explained as good governance, especially when Anteo under Richard Martin as CFO made numerous errors in the released financials and numerous corrections have had to be made.
Here is what ASX say in their commentary
"Commentary While ultimate responsibility for a listed entity’s financial statements rests with the full board, having a separate audit committee can be an efficient and effective mechanism to bring the transparency, focus and independent judgement needed to oversee the corporate reporting process."
You have a fox looking after the hen house, if you ask for my opinion.