Smiles may face court action from regulator

GOLD Coast-based dental group Smiles Inclusive faces court action over its continued failure to release its half-year results.

The company, now led by CEO Michelle Aquilina, saw its shares suspended from trading on March 2 after failing to meet the deadline for delivering audited results for the six months to December 31.

It then released its March cashflow report on June 1 showing positive cashflow of $500,000 but later was forced to admit it made a series of mistakes and actually had negative cashflow of $614,000 – a difference of more than $1.1 million.

The company said the mistakes were a result of “transposition and flow through errors” made when the original reports were lodged.

On Thursday, Smiles released a statement showing its response to a grilling from the ASX over the reporting errors.

The company wrote it uncovered the errors following questions from the market operator’s compliance team.

It said they were a combination of “human and system errors” and mistakes in the December quarter report flowed through to the March quarter.

Towards the end of the letter Smiles reveals it has received a notification from corporate regulator the Australian Securities and Investments Commission that it intends to take court action over its failure to release the audited half-year accounts.

“ASIC have (sic) not granted an extension for SIL to lodge the accounts and have advised of their intention to submit an application to the court in respect of SIL’s default,” the letter reads.

The Bulletin put questions to ASIC about its plans to go to court but the regulator, through a spokesman, declined to comment. However, the penalties for Smiles if it fails to comply with a court order can range from fines being imposed to an order to wind up the company. Elsewhere in the Smiles letter to the ASX, the company says the decision by 10 dentists to terminate their service agreements with the company would not have a material impact on the company’s operations.