The Takeovers Panel has ordered Humm Group (ASX:HUM) founder Andrew Abercrombie to divest a $11 million stake following findings that the board repeatedly misled the market.
The ruling mandates the sale of 15 million shares, which will vest to the Commonwealth and be auctioned by the Australian Securities and Investments Commission.
The dispute centres on Abercrombie's conduct during a $385 million acquisition bid from Credit Corp (ASX:CCP).
The panel determined that while the board publicly claimed to be evaluating the proposal, Abercrombie had already privately rejected it.
During this period of misinformation, Abercrombie controversially increased his holding by 3%, acquiring shares immediately after the offer was disclosed.
Consequently, the panel has frozen his ability to use "creep" provisions to further increase his stake for at least six months.
The panel described the circumstances as "unacceptable", noting that the board's statements were contrary to an efficient and informed market.
While Abercrombie has requested a review of the declaration, the pressure on Humm’s leadership continues to mount.
The company recently appointed two new independent directors, citing a positive internal governance review, but activist shareholders have dismissed the claim as an "insult" to investors.
The regulatory crackdown arrives at a critical juncture for the financing group, with an extraordinary general meeting scheduled for next month.