Derivex

Hi all[biggrin]

from the Derivex Website

Show Cause Notice served on ASIC
Posted to website derivex.com.au at 10:01am Wednesday 5th October 2005

“Derivex Limited
Locked Bag 5
Millers Point NSW 2000

13th September 2005

Mr Adrian Bock
Australian Securities & Investments Commission
Level 18, No 1 Martin Place, Sydney, NSW 2001

PUBLIC NOTICE TO SHOW CAUSE

Dear Mr Bock,

On the 13th of January 2005 ASIC served the first of four Regulatory Breach notices on Derivex Limited who at that time held the Master Licence for Australia to sub licence a range of proprietary financial products. Derivex Limited’s obligation under the terms of the licence was to introduce an innovative new range of principal only lending products to the Australian marketplace by sub licencing specific functions to local AFSL licenced and experienced entities. It should be noted that Derivex Limited was not a lender but was a beneficial licence holder of local intellectual property rights relating to specific product rights only.

As recently as in a telephone conversation on 13/9/05 and during a number of Section 19 examinations conducted by ASIC’s A Bock and D Bechara in relation to regulatory breach notices, ASIC personnel both on and off the record refused to provide details of the regulatory breach and to this date some nine months later, ASIC still refuses to detail the alleged breach/s.

The request for details of the alleged breach and the fact that ASIC refuses to disclose the breach have been detailed on the derivex.com.au website on an ongoing basis publicly for nine months.

Derivex Limited under the terms of its licence agreement was required to remedy any regulatory breach within 90 days. It has been unable to do so due to ASIC’s refusal to specify the breach or conduct a meeting to address the breach issues that they say exist.

It is not possible to remedy an alleged breach if ASIC continue to refuse to disclose the breach issues yet continue to issue subsequent breach notices on an ongoing basis in an effort to halt the sub licencing of Distribution and Lending Licence rights in Australia.

The deliberate and continuing ASIC actions over nine months have left no alternative but the unconditional cancellation of the Master Licence of Derivex Limited within Australia.

The unconditional loss of the Master Licence rights by Derivex Limited means that the company will accrue sub licencing revenue losses in the order of A$30,000,000 and A$25,000,000 respectively for sub licence Distribution and Lending Licence rights as has clearly been detailed to ASIC.

In addition Derivex Limited will suffer substantial management fee losses for product sub licence periods that extend over forward monthly accrual periods from 5 up to 30 years.

Further ASIC continue to refuse to return company registers for the companies detailed and have continued their “abuse of process” to legally limit under Section 19 examination principles any individual’s capacity to discuss issues, facts and discussion arising in these examinations until such time as they personally provide such release in writing.

ASIC further assert in transcript and off the record conversation when asked just when that written release may occur or to disclose the regulatory breach, that ASIC is under no obligation to ever do so. This action can only be interpreted as a deliberate and malicious abuse of the legal powers conferred upon ASIC by relevant Federal Government statutes.

The position of Derivex Limited has been to act in good faith and cooperate with ASIC fully with regard to their investigations. It is now obvious after nine months and the “cart blanche” attitude communicated by ASIC personnel from day one ie 13/1/05 that there is no limitation to the amount of time and taxpayers funds that ASIC will waste in order to shut down product licencing and sub licencing in Australia by its abuse of special powers and direct defamation in the Australian press of the product range that is the very subject of Derivex Limited’s now cancelled Master Licence agreement.

It is now our position on behalf of all shareholders and holders of beneficial interests and options interests to publicly pursue an unspecified and unlimited damages action against ASIC and the MIAA whom ASIC acted in conjunction with in January 2005 to “shut down” our product licencing operations. These licencing operations were advertised formally in the Australian Financial Review and Australian newspapers in December 2004. Further we shall support a series of individual based class actions to redeem losses.

Derivex Limited had not been able to complete the licencing of the principal only product range in Australia as required to do under the terms of its Master Licence agreement due solely to ASIC induced limitation of their commercial rights via its ongoing Regulatory Breach strategy and direct product set defamation in conjunction with other local market vested interests.

It is interesting to note that the forthcoming and actual strategy of ASIC and MIAA was predicted in a number of separate and detailed submissions delivered to Derivex Limited from professional communications groups in early January 2005.

Further it is disconcerting that ASIC uses taxpayer funds cart blanche to halt and inhibit the licencing and subsequent release of a product set that has the true potential to benefit almost every Australian that is an investment or residential property owner and the local Australian economy in particular.

We see no alternative but to appoint a specialist ASIC consultant to conduct this redress process on behalf of Derivex Limited utilising the best independent legal advice and the services of an international litigation funding group to drive the processes to conclusion.

This notice has been drafted during the period 13/9/05 to 27/9/05 and has been hand delivered to ASIC on Wednesday morning 28/9/05 at 10 am in ASIC’s Sydney offices. It will be circulated locally and internationally from 10am on Wednesday 5/10/05 if unconditional redress is not agreed to the complete satisfaction of all Derivex Limited direct and beneficial stakeholders by 10am on Wednesday 5/10/05.”

Regards
Bryce Inglis
Financial Advisor
[email protected]

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