If you still own Phoslock Environmental Technologies Ltd (ASX: PET) shares, there's a good chance you have forgotten about them.
This formerly-listed ASX share hasn't been available for share trading on the ASX for more than a year now. Phoslock's last day of public trading was way back on 16 September 2020. That was succeeded by a seemingly-routine trading suspension. That suspension ended up turning into an effective freeze on trading that is still going on today.
So what happened with Phoslock?
Well, following the initial suspension of trading, 21 September 2020 saw the company release a market update. This informed investors of the following:
Phoslock… wishes to advise that an ongoing independent investigation initiated by the chairman and managing director has revealed certain accounting irregularities relating to PET's China Operations.
The investigation, being undertaken by KPMG's forensic accounting division, follows suspected accounting irregularities discovered during the audit process for the half year ended 30 June 2020.
Then, on 8 October 2020, Phoslock put out another announcement, this one expanding on these "irregularities":
Fraudulent activity has been identified, including false accounting and falsification of invoices and service contracts where PET or its subsidiaries are the recipient, and potential improper tax reporting and misappropriation of funds. Several China-based employees have been either stood down or terminated in relation to these matters. It has also been confirmed that several previously undisclosed related party transactions have taken place.
It was at this point that Phoslock determined that "the company's shares will remain suspended from trading until such time as the investigations are complete; the financial and accounting impact has been assessed; and audited accounts for the half year have been released".
Phoslock share price: Stuck in purgatory
Well, investors are still waiting as we approach December 2021. An update on this matter came as part of Phoslock's September quarterly report. This was released to investors back on 29 October. This stated that Phoslock's board and management "continue to assign a high priority to the relisting of PET's shares on the ASX".
Earlier this month, we had Phoslock's latest update. This stated that "the pathway to relisting involves satisfying ASX in relation to two key requirements".
The first of these involves submitting "statutory accounts without audit qualifications on opening balance". Phoslock reckons it will be in a position to fulfil this requirement by February 2022.
The second "involves the ASX being satisfied that the company has taken all reasonable measures to ensure shareholders are fully informed in relation to all relevant matters concerning the company".
On this second requirement, Phoslock says that "we are now in a position to brief shareholders more fully having now completed a number of important phases of the investigations, placing us in a position to provide shareholders with a more detailed update as to where those matters now sit".
So it seems that shareholders can circle February 2022 as a possible return date of this company to the ASX boards. Until then, the waiting game looks set to continue for investors.
