By STAFF REPORTERS
The Securities Commission has publicly censured Mt Maunganui technology company Inertialess Drive Corporation, despite being convinced that founder Ken Pedlar is "sincere about his product."
The commission warned people to "think carefully" about investing in Mr Pedlar's Inertialess Drive companies, after investigating his efforts to find backers for the development of his kinetic storage battery.
As tipped in the Business Herald in August, the commission has concluded that the company's prospectus offerings are not sufficient and says it cannot find evidence of a United States subsidiary in which shares were originally being sold for $US1000 ($2310) apiece.
Yesterday, the commission's senior executive of operations, Norman Millar, said that despite the warning, Mr Pedlar "is sincere in his belief in [his product]. That's my impression."
Despite this, the commission has banned advertising for the offer of shares in Inertialess Drive Corporation of Tauranga and subsidiary Inertialess Drive Incorporation USA.
The Tauranga company does not have a current registered prospectus, while shares in the US company have been offered in a document termed a prospectus but which does "not provide the information required to be in a registered prospectus," the commission says.
"Searches by the United States Securities and Exchange Commission indicate that Inertialess Drive Incorporation USA has not filed a prospectus in the United States.
"The commission has been unable to find any record of the company being incorporated in any states of the United States."
The Business Herald understands that Mr Pedlar's lawyers have been in contact with the New Zealand commission since Inertialess was censured.
The share register of Inertialess Drive Corporation records that 1200 people, mostly New Zealanders, paid more than $6.8 million to Mr Pedlar for shares between October 1998 and last March.
Mr Pedlar left for Switzerland this year, saying he would establish a research and development faculty for his technology.
He could not be reached for comment last night, but Inertialess staff in Mt Maunganui said he was due back in New Zealand next Wednesday.
They refused requests for shares in either the Tauranga or US companies.
High-tech firm censured for invalid prospectus
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