Applabs directors forced to lower Sovereign stake

Morgan Stanley Wealth Management has been appointed by the corporate watchdog to sell a portion of shares in Sovereign Gold Company held by former Applabs Technologies directors which were found to have been acquired invalidly.

The Australian Securities and Investments Commission said today that Morgan Stanley would sell 22.9 million Sovereign shares, equal to 1.62 per cent of the company’s issued capital.

In July the Takeovers Panel found that Applabs directors Patrick Glovac, Rocco Tassone and Charles Thomas had grown their combined voting power in the business to 21.59 per cent.

The panel, which comprised Sharon Warburton, Karen Evans-Cullen and Karen Phin, found that the trio had increased their voting power in Sovereign beyond the 19.9 per cent threshold without disclosing that they had done so.

Morgan Stanley will have three months to dispose of the shares, with Messrs Glovac, Tassone and Thomas unable to participate in the sale.

They will be allowed to retain their combined interest in Sovereign at 19.9 per cent. 

Perth-based Applabs was the subject of a reverse takeover by NSW-based online recruitment company Search Party Group earlier this year.

Mr Thomas is a non-executive director of Search Party.

Sovereign shares closed 20 per cent higher to 0.6 cents each.