FMA cancels medical firm's prospectus

The FMA said the claimed purpose of the FMP's offer was to set up a chain of renal dialysis clinics in New Zealand.

New Zealand's market regulator has cancelled the allegedly misleading offer documents of a company that claimed it would use investor money to set up dialysis clinics.

The Financial Markets Authority said this morning "in the public interest" it had cancelled the prospectus of FMP Medical Services "because it believes it is false or misleading".

"FMA is also of the view that the offer document is likely to deceive, mislead or confuse," a statement from the FMA said.

It is the first time the FMA has cancelled any offer documents and the regulator said it means FMP must stop the offer, cannot allot any shares and must immediately repay any investors who have already put forward money.

FMP is directed and owned by Antone Thomas Pedras, who the FMA says also goes by Chris Pedras.

The FMA said the claimed purpose of the FMP's offer was to set up a chain of renal dialysis clinics in New Zealand.

"FMP failed to effectively communicate the risks of investing, including its plans to substantially dilute the value of any public investment, and its lack of any real business plan," said the FMA's Simone Robbers.

"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. We could not allow FMP's offer to go to market," Robbers said.

"By picking this up at an early stage FMA has been able to step in and take action to protect potential investors considering this offer," Robbers said.

FMP's prospectus was registered in August and the FMA said it issued an interim order stopping the allotment of shares while it reviewed it.

The scheme was still in its early days and Pedras had spent the past 18 months investigating "the feasibility and viability of the proposed scheme", according to the offer document.

"This has included identifying suitable sites, negotiating for the supply of equipment, identifying suitable management staff and identifying funding needs. There is currently no business trading activity."

Pedras had earned most of his business experience in the US, including running a chain of nightclubs in Hawaii, the document said.

His "diverse business background" also included developing a network of 368 automatic teller machines (ATMs) in Hawaii.

"He then created his own armoured car service and subsequently sold both activities to the Bank of America for a multi-million-dollar sum."

The offer document explained Pedras, who is an American living in Orewa, was offering 7 million existing shares "to friends and associates" priced at one cent each.

Another 10 million shares were also being offered at $1 each, with a minimum individual subscription of 20,000 shares.

None of these shares had any voting rights and returns were to be paid by way of regular dividends.