Liberal Senator Dave Sharma has called on the Australian Securities & Investments Commission (ASIC) to clarify whether it is investigating the abrupt withdrawal of the $44 billion initial public offering (IPO) of Firmus, an artificial intelligence data center company. In a letter to ASIC, Sharma expressed concerns about the adequacy of disclosure, the accuracy of information provided to prospective investors, and the conduct of the bookbuilding process.

The Firmus IPO, which had been highly anticipated, was suddenly halted last week amid reports of insufficient investor demand. According to Sharma, earlier communications to the market suggested there was strong institutional interest at the proposed $11 per share offer price. However, subsequent developments contradicted those indications, raising questions about the reliability of information presented during the IPO process.

Sharma also raised issues related to the disclosure of market-sensitive information to shareholders of Maas Group, a company holding significant equity in Firmus and which suffered a $1 billion reduction in market capitalization following the IPO’s collapse. The senator highlighted that Maas Group’s commercial contracts and equity stake in Firmus warranted timely and transparent disclosure to its shareholders, especially in light of the termination of a previously announced partnership between Firmus and the CDC Group—a detail that was not publicly disclosed until media reports surfaced.

“These matters potentially engage provisions of the Corporations Act, including those related to misleading or deceptive conduct, false or misleading statements concerning financial products, and fundraising disclosure obligations,” Sharma wrote. He further suggested that questions might be raised regarding Firmus’s compliance with ASX continuous disclosure requirements.

The launch of the Firmus IPO was initially met with substantial enthusiasm. The bookbuilding process, led by Bank of America, JPMorgan, and Morgan Stanley, began with reports stating indications of interest well beyond the offer size. However, investor sentiment shifted sharply, resulting in multiple price reductions—from an initial $11 per share down to as low as $8.25—and a reduction of the target raise from $5 billion to $3 billion before the IPO was ultimately withdrawn.

Oliver Curtis, a convicted insider trader and co-founder of Firmus, declined to comment on questions about the IPO’s marketing and whether investors were potentially misled. Speculation has arisen that ASIC may open a formal investigation into the IPO’s handling and promotion, though the regulator has not confirmed whether such an investigation is underway.

The fallout from Firmus’s failed IPO has drawn attention to the transparency and governance practices in significant market transactions, with investors and regulators closely monitoring how disclosure obligations are met in high-profile fundraising efforts.