Speculative proceedings before takeovers panel quashed
Morris Landau of this firm acted for a public company listed on the Australian Stock Exchange (“the listed company”) in an application brought against it in the Takeovers Panel. The applicant was a director of the listed company. The application was made under Section 657A of the Corporations Act 2001 (“the Act”) and primarily sought to challenge the placement of a large parcel of 18 million shares. It was alleged that the placement was made without formal Board approval and that the directors had been acting in concert with a substantial shareholder in order to have the Applicant removed as a director at an upcoming Board meeting. There were other disputes including a dispute relating to beneficial ownership tracing notices issued by the applicant without Board approval.
The extraordinary meeting at which the applicants/ director was expected to be removed as director, was set to take place within days of the filing of the application with the Takeovers Panel. The Chairman of the Takeovers Panel immediately appointed three of the forty seven members of the Panel to form a sitting panel to adjudicate this matter. Within twenty four hours of the referral the sitting panel convened a meeting between them to discuss whether the application had any merit. Prior to this meeting we made written submissions on behalf of the listed company seeking an immediate dismissal of the application. We also advised the panel that the shareholder that had received the disputed share allotment, was prepared to give an undertaking not to vote its shares at the upcoming extra ordinary general meeting.
Based upon the submissions made by our firm on behalf of the listed company, the Takeovers Panel declined to commence any proceedings against the listed company. The Panel found that the application was based upon “speculative assertions” among other things. The Panel also held that the Applicant had failed to prove that he had the requisite authority to issue the tracing notices.
As is its usual practice, the Takeovers Panel distributed its draft decision and media release to the parties for comment. The draft decision and media release recycled many of the “speculative assertions” made against the listed company. Our firm made further submissions to the Takeovers Panel, requesting that the Panel send a clear message to future applicants that it will not allow itself to be used as a vehicle to recycle speculative and unfounded allegations against a company and its directors. The Takeovers Panel decision and media release were substantially amended in line with our submissions.
Decisions and media releases of the Takeovers Panel can be accessed through their website which is found at www.takeovers.gov.au
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