ASIC fines Rhinomed over non-disclosure of promotional campaign
The Australian Securities and Investments Commission (ASIC) has fined respiratory techology company Rhinomed for having failed to disclose a deal with gym chain Fitness First.
The ASX-listed medical technology company was has been fined $33,000 by the corporate watchdog for failing to disclose a promotional deal to promote its Turbine sports respiratory product through Fitness First.
In a statement, ASIC explained Rhinomed had allegedly failed "to comply with its continuous disclosure obligations".
Rhinomed has two key products, the Turbine and Mute, with the former designed to assist breathing during exercise and the latter to improve breathing during sleep.
ASIC alleged that, on 6th June 2014, Rhinomed had "entered into an agreement concerning a promotional campaign, in which Fitness First was to promote the Turbine product in some of its gyms and health clubs in Australia".
More than a month later, on 9th July 2014, Rhinomed announced to the ASX that it would partner with Fitness First health clubs to promote Turbine throughout July.
In its 9th July statement to the market, the nasal technology junior described the agreement as "a real coup" and an "outstanding commercial opportunity".
ASIC issued Rhinomed with an infringement notice and the company, led by Chief Executive Michael Johnson, complied with the infringement notice and paid the $33,000 penalty on 9th June this year.
Rhinomed said in a statement to the ASX on Wednesday that it "strongly denies the alleged contravention" and argued that the deal with Fitness First was not price sensitive and did not need to be disclosed to the market immediately.
The company statement read "Rhinomed fundamentally disagrees with ASIC's position regarding the infringement notice in the present circumstances ... compliance with the
infringement notice does not constitute any admission of liability by Rhinomed in respect of this matter.
The Melbourne-based group dismissed the fine as "relatively immaterial" and said it decided to pay ASIC rather than dispute the matter to avoid further "cost and distraction".
Rhinomed has a market value of $20 million.
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