The Financial Markets Authority has cancelled an offer document for the first time in its history.
The authority's head of primary regulatory operations, Simone Robbers, says it cancelled the combined offer document of FMP Medical Services because it believes it is false or misleading.
The purpose of the FMP Medical Services offer document was to set up a chain of renal dialysis clinics in New Zealand.
Ms Robbers says the decision to cancel it is in the public interest.
She says the document fails to give investors adequate information about the offer or business plan and some material information just was not there.
Ms Robbers says the authority entered into a dialogue with FMP Medical Services about the document, but the concerns have not been resolved.
She says FMP Medical Services must stop the offer and cannot sell any shares.
Ms Robbers says the company must immediately repay any investors who have subscribed, although FMP Medical Services say no-one has.
Cancellation 'should' increase investor confidence in NZX
The Financial Markets Authority says the cancellation of an offer document should increase investor confidence in the New Zealand sharemarket.
Ms Robbers says the action is part of the authority's '"top of the cliff action" whereby it steps in and takes action at an early stage to protect investors considering the offer.
"By cancelling this offer we've avoided the main risk of investors putting money in and then finding the investment isn't quite what it was cut out to be or has been significantly diluted which was the risk in this case."
Ms Robbers says she hopes it will increase confidence in the markets because people will know the authority is spotting issues as they arise and before they come to market.
She says offer documents must not be false or misleading and must include all material information to assist investors when they are deciding whether or not to invest.
