Bryan Frith, in The Australian, has taken some issues with the ASIC response to breaches by Ray Catelan. Who? Ray was the founder of property data firm RP Data. Until recently he was also a substantial holder in CEC having bought his stake from Tom Hedley. The transactions discussed by Frith relate to CMI. Frith has previously written on the antics of Catelan at CMI which have also been noted in the Courier-Mail.Catelan already had a substantial stake in CMI when his daughter took a stake via Tinkerbell Enterprises Pty Ltd atf Leanne Catalan Family Trust. Tinkerbell's substantial holder notice for CMI reveal accumulation over time then a large acquisition 23 November 2010. The ASX substantial holder notice was 26 November. On 26 November Ray Catelan coincidentally lodged notice that he had ceased to be a substantial holder in CEC after offloading his entire 5% holding, presumably related to the gift to his daughter for her acquisition.
Catelan had acquired his holding in CEC from Hedley in June 2008. That transaction itself included a regulatory breach in that Hedley had failed to adequately notify of his own substantial holder position previously.
Catelan and his daughter were associates and consequently in breach of takeover corporations provisions. Frith is correct to question whether the penalty is appropriate given that apparently Catalan has prior form: "It is not the first time that Catelan has suffered an unacceptable declaration from the panel."
Catelan acquired his CEC holding from Hedley for more than $1million. He got just $188k back when he sold on November 26. There was no other substantial holder notification on the other side of this off-market transaction. So it looks like the reason for the CEC sale could have been part of a shuffle to fund his daughters stake in CMI?