Australia’s corporate regulator is investigating the role of investment banks in promoting the initial public offering of Firmus, a data centre operator backed by Nvidia, after concerns emerged over information provided to investors during the marketing and book-building process, The Australian newspaper reported on Thursday.
The Australian Securities and Investments Commission (ASIC) is “making targeted inquiries of the joint leader managers” of the proposed IPO, its chair, Sarah Court, said in a response to a letter from Liberal Senator Dave Sharma, according to the newspaper. Court also said the regulator was aware of questions concerning the accuracy of information supplied to institutional and wholesale investors during the offering’s marketing and book-building process.
Firmus shelved its planned $5 billion IPO on 9 October, saying it would pursue alternative fundraising options, including raising capital from private markets. The proposed share sale had attracted scrutiny as its pricing came under pressure from investor concerns about the company’s debt and its lack of a track record in building artificial intelligence data centres.
The book-building process for the offering was led by Bank of America, JPMorgan, Morgan Stanley and Australian brokerage Morgans. The banks and broker were responsible for leading the process through which investor demand for the shares was assessed ahead of the proposed listing.
Bank of America declined to comment when contacted by Reuters. JPMorgan, Morgan Stanley and Morgans did not immediately respond to requests for comment. ASIC did not respond to a separate request for comment from Reuters.
The proposed IPO was priced at A$11 per share, but the valuation came under pressure as investors weighed the company’s debt burden and its experience in developing AI data centre infrastructure. Concerns about the accuracy of information provided during the offering’s promotion have now become a focus of the regulator’s inquiries, according to Court’s letter as reported by The Australian.
The inquiries concern the conduct of the banks and brokerage involved in managing the offering, rather than an announced finding of wrongdoing. The regulator’s awareness of questions about investor disclosures was set out in Court’s correspondence with Sharma, who had written to ASIC about the IPO.
Firmus withdrew the offering on 9 October and indicated that it would seek other sources of funding, including private-market capital. The decision ended the immediate prospect of the planned public share sale, while leaving the company to pursue alternative financing arrangements.
The regulator has not publicly provided further details of its inquiries in response to Reuters’ request for comment.
