When COVID was first introduced to the world, everyone wanted a slice of the hand sanitiser market but three years later, misleading claims by producers are being retrospectively called out by regulators, one of which has seen ASIC throw the book at biotech company Holista Colltech (ASX: HCT).
After a long-running investigation and litigation which included claims of their sanitiser being able to kill the AIDS virus, Holista Colltech has now confirmed a settlement with the Australian Securities and Investments Commission (ASIC) concerning allegations of misleading statements. The resolution comes after an extensive investigation into the company’s activities during the critical period of January 2020 to July 2020.
Under the terms of the settlement, Holista Colltech has agreed to several key provisions outlined by ASIC. This includes accepting certain declaratory relief sought by ASIC, acknowledging a joint statement of agreed facts, and participating in a hearing to determine any additional relief that ASIC may request.
Dr. Rajen Marnickavasagar, Holista Colltech’s current Managing Director and CEO, who was also named as a defendant in the ASIC proceedings, has consented to the settlement terms. As part of the agreement, Dr. Rajen has accepted orders requiring him to pay a pecuniary penalty of $150,000. He will also face disqualification from managing a corporation for a period of four years. Furthermore, Dr. Rajen has committed to contributing AU$200,000 towards ASIC’s investigation and litigation costs.
In light of these developments, the Holista Colltech Board is actively exploring options for Dr. Rajen’s replacement, with the aim of making an appointment before the ASIC orders take effect. Dr. Rajen, who remains a major shareholder in the company, has expressed his ongoing commitment to Holista Colltech and will make himself available to provide operational input if requested by the Board to ensure business continuity.
David Deloub, Holista Colltech’s non-executive chairman, welcomed the resolution of ASIC’s investigation, emphasising the importance of moving forward positively. The company’s stakeholders, including investors and shareholders, are eager for clarity and closure regarding the allegations that have been looming over Holista Colltech.
This settlement brings an end to a challenging chapter in the Company’s history, which had been marred by legal proceedings and regulatory scrutiny. Holista Colltech now looks ahead to a future where it can concentrate on its core business activities and potential growth prospects.
Despite these legal matters playing out in the background, they have not stopped Holista Colltech from selling their health food products, collagen products and dietary supplements.
For the 6 months ended 30 June 2023, Hollista Colltech reported $3.1 million revenue.
Alfred Chan is a Business Reporter at The Sentiment specialising in ASX-listed small cap companies, a bloodstock enthusiast and former equities analyst.
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