An ASX-listed company, together with its chief executive, has been accused of spruiking false COVID-killing claims about its products.
The Australian Securities and Investments Commission (ASIC) is suing Holista Colltech Limited (ASX: HCT) and its executive chair Dr Rajendran Marnickavasagar, seeking penalties and declarations from the Federal Court.
The corporate watchdog is also advocating for Marnickavasagar to be banned from managing corporations.
Holista shares are currently in a trading halt, pending a response from the Western Australian company.
The stock last traded for 6.6 cents, giving Holista a market capitalisation of around $18 million.
The accusations against Holista
Marnickavasagar allegedly stated in a YouTube video in February 2020 that Holista’s NatShield sanitiser spray killed the coronavirus “involved in the current Wuhan outbreak”.
ASIC is claiming this was misleading as the product had not been tested against COVID-19 at the time.
Holista also announced to the ASX on 9 April 2020 that 415,000 bottles of NatShield were purchased by a business named Health Therapies.
ASIC alleges this $3.8 million order had not been placed at the time.
The ASX company then disclosed to the market on 9 July 2020 that the Health Therapies deal would not be met, and its total revenue for the financial year was back down to just $500,000.
In another ASX announcement in February 2020, Holista claimed it had executed a binding term sheet with another business to collaborate on a new sanitising nasal balm product.
This disclosure is also alleged to be false, as ASIC claims the deal was actually executed 2 months later.
ASIC deputy chair Sarah Court said her organisation is continuing to focus on misleading claims about COVID-19.
“In this case, we are concerned by the allegedly misleading claims, made when there were concerns about a potential pandemic, that NatShield was effective against the virus later known as COVID-19 when it had not been tested against that virus.”
The corporate regulator is accusing Holista of violations of the Corporations Act in its civil proceedings.