Ron Smooker, Partner, Corporate Advisory / M&A,
Ron Smooker explains the new restrictions on accessing company
share registers to Boardroom.
To listen to the radio interview, please click
DAVID BUSHBY We're speaking with Ron
Smooker. He's a partner in the Corporate Advisory and M&A
Practice Group for Clayton Utz in Melbourne. Welcome Ron.
RON SMOOKER Good afternoon
DAVID BUSHBY Ron new laws have just been tabled
in Parliament to restrict access to share registers in order to
crack down on the use of these registers to make low-ball offers to
buy shares from unsuspecting retail investors. Can you run us
through the changes?
RON SMOOKER Look there's been a
long-standing concern about the misuse of personal information on
company registers, not just restricted to the use for low-ball
The principal effect of the amendments to the Corporations Act
are to make it clear that there are legitimate and illegitimate
purposes for gaining access to the registers.
An illegitimate purpose will be things like a charity using the
register to look for donations, people accessing the registers for
information about the personal wealth of the shareholders, brokers
using it as a means to solicit clients, and of course the making of
offers to purchase shares other than in a takeover.
The way the new regime will work is the person seeking access to
the register has to lodge an application with the company setting
out, amongst other things, the purpose for which they want to have
a look at the register. If this purpose includes an illegitimate
purpose then the company can refuse access to that person.
DAVID BUSHBY So for those whose job it is to
grant or deny access to those registers, how does this affect that
decision process? How do they make that call?
RON SMOOKER Yeah look, the job suddenly got a
bit more difficult.
Currently, they've got a simple decision tree. If somebody
lodges an access request and they pay the fee then the company has
to give them access to the register of members.
The new provisions introduced some subjectivity and some
conditionality around that. They have to have a good look at the
application, work out what purpose the access is being sought for
and if it's an legitimate purpose they then have to make the
decision as to whether or not to grant access.
The companies and the people that make these decisions will need
to have some fairly clear guidelines and there is going to be some
serious training needed so that the staff actually can make the
right decisions because obviously if they make the wrong decision
there's always the possibility of litigation.
DAVID BUSHBY And Ron just finally could these
restrictions pose any difficulties from a takeovers
RON SMOOKER As a matter of law, no because
access to the registers for the purposes of takeover is a
Of course, there probably are some practical difficulties. A
bidder whose looking to make a hostile bid for a company may not be
that comfortable with disclosing to either the company or the world
that the reason they're looking at the register is so they can
make the takeover bid.
There's going to have to be some deft footwork to get around
that but it really is a tactical issue that just needs to be borne
DAVID BUSHBY Indeed some great insights there.
We'll leave it there for now and thank you again for your time
RON SMOOKER It's a pleasure, thank you.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
On 12th November 2016, new laws will commence to protect small businesses from unfair terms in standard form contracts.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).