SYDNEY, AUSTRALIA — A businessman is to be fined by the Federal Court for misleading his investors about his purported invention, an invisible, spray-on condom.The corporate regulator recently obtained orders declaring that Ravi Narain’s former employer Citrofresh International had engaged in misleading conduct in defiance of the Corporations Act. The Australian Securities and Investments Commission’s proceedings against the organic anti-bacterial product company Citrofresh and Mr Narain arose from two “misleading” statements made to the Australian Stock Exchange in 2005.
The Court declared that Citrofresh had engaged in misleading conduct by falsely stating it could “offer a global solution to reduce and eventually stop the spread” of HIV.
The government also claims Citrofresh had said “without reasonable grounds that the use of its product as a post-coital application would act as an invisible condom and that this would have a significant impact on reducing the transmission of HIV and sexually transmitted diseases.”
Citrofresh had also claimed publicly that its product provided a “non-hazardous, non-toxic and effective solution that dealt with emergency disease control and prevention for HIV, human influenza A virus, SARS and human rhinovirus.”
Narain could be hit with a $400,000 maximum penalty for the two allegations that he engaged in misleading or deceptive conduct and failed to exercise his duties as a director with a reasonable degree of care and diligence regarding the statements.
