Australia: Corporate Law News

Last Updated: 20 May 2008
Article by Leigh Brown

Regulatory Authorities


Disclosure relief for rights issues extended

ASIC has given Class Order relief ensuring that non-traditional rights issue structures are covered by the prospectus and PDS disclosure exemption for rights issues.

The disclosure exemption for rights issues was introduced in 2007 and allows listed entities to conduct a rights issue without a prospectus or PDS. The current exemption is limited to quoted securities or interests, but ASIC now considers that any rights issue should fall within the disclosure exemption where it provides an equal opportunity to all holders to participate and does not compromise retail investor protection.

Class Order (CO 08/35) Disclosure relief for rights issues (Class Order), is designed to encourage companies to use pro rata rights issues, rather than placements, so retail investors can participate in fundraising offers. The Class Order provides relief: for accelerated offers to institutions; from the requirement to lodge multiple cleansing notices; for disposal of a shortfall; and to make offers of shares to convertible security holders.

To correspond with the Class Order, ASIC has released Regulatory Guide 189: Disclosure relief for rights issues (Regulatory Guide) and Report 128: Report on submissions to CP 91 Non-traditional rights issues (Report).

Click here to access the media release, the Class Order, the Regulatory Guide and the Report.


Consultation paper released on Foreign Exempt companies

On 6 May 2008, ASIC and Standard & Poor's Index Services (S&P) released a consultation paper seeking market feedback on a proposal to make Foreign Exempt companies on ASX eligible for index inclusion, provided the primary listing of the stock is on a 'developed market exchange'.

The 'Foreign Exempt' classification seeks to avoid regulation of companies that are already well regulated by the rules of an overseas primary market. The classification entitles certain ASX listed companies to comply with a subset of ASX Listing Rules, so ong as ASX is satisfied that they are subject to and comply with the listing rules of their home exchange. Companies classified as Foreign Exempt are obliged to report to ASX all information that is both public and supplied to their home exchange.

Foreign Exempt companies are currently excluded from index eligibility due to previously held concerns regarding the timing and disclosure of relevant corporate actions. However, recent analysis by ASX and S&P has indicated that these concerns are not valid. The disclosure requirements of developed overseas market exchanges are sufficient to satisfy S&P's global index maintenance requirements. Therefore there is no basis for exclusion from index eligibility provided all other criteria are met.

Submissions in response to the consultation paper are invited by 31 May 2008.

Click here to access the press release and the consultation paper.

Takeovers Panel

BioProspect Limited 01 panel publishes reasons

On 12 May 2008, the Takeovers Panel (Panel) published the reasons for its decision on an application from BioProspect Limited (BioProspect) in relation to its affairs. As previously reported in CLN, the Panel found that the circumstances involving the acquisition of shares by ANZ in BioProspect through a securities lending transaction did constitute unacceptable circumstances and was minded to make a such a declaration. However, the Panel considered that the unacceptable circumstances would be properly remedied by undertakings offered by ANZ. Accordingly, the Panel did not feel the need to make any declaration or orders.

Click here to access the Panel's reasons.

Programmed Maintenance 02 declaration of unacceptable circumstances

On 7 May 2008, the Panel made a declaration of unacceptable circumstances and final orders in relation to an application by Spotless Investment Holdings Pty Ltd (Spotless) in relation to the affairs of Programmed Maintenance Service Ltd (Programmed).

By way of background, on 2 April 2008 Spotless made an off-market takeover bid for all shares in Programmed. The Panel considered two issues. Firstly, two weeks after the takeover bid, Programmed lodged an investor presentation with ASX. The investor presentation contained charts which disclosed Programmed's calculations of the takeover premium for the bid, based on 6-month and 12-month Volume Weighted Average Prices (VWAP) ending 26 March 2008 of Programmed, and compared it with the closing price of Spotless on 2 April 2008, being the date of lodgement of the bidder's statement. Secondly, on 22 April 2008, Programmed sent a letter and an accompanying leaflet to shareholders which contained a number of quotes from the media in relation to the bid.

The Panel considered that these circumstances were unacceptable. In relation to the investor presentation the Panel considered that where a target or bidder selects a particular premium implied under the offer, it needs to be prepared to explain the basis upon which that presentation has been selected. In this instance, Programmed insufficiently disclosed why 6-month and 12-month VWAP were chosen compared with Spotless' closing price on 2 April 2008, in calculating the premiums.

In relation to the material sent to Programmed shareholders, the Panel noted that it should be prepared to the same standard as if it were included in the target's statement. As a result, if such material includes a quote from another person, the target directors are effectively adopting that statement as their own and should be prepared to substantiate and corroborate it. In this instance, two quotes from the media concerning the potential undervaluing of Programmed were made without sufficient substantiation from the target.

The Panel made a declaration of unacceptable circumstances with regard to the public interest and matters in section 657A(3) of the Corporations Act 2001 (Cth). The Panel ordered Programmed to send a clarification letter in a form approved by the Panel to shareholders.

Click here to access the Panel's media release, declaration and orders.

Mount Gibson Iron Limited panel publishes reasons

The Takeovers Panel (Panel) has now published the reasons for its decision on an application from Mount Gibson Iron Limited (Mount Gibson).That decision has previously been reported in CLN.

Click here to access the Panel's reasons.


Beconwood Securities Pty Ltd v Australia and New Zealand Banking Group Limited [2008] FCA 594

Justice Ray Finkelstein has held that a lender of securities under a securities lending agreement does not have an equity of redemption or other equitable estate immediately upon or after the 'loan' of those securities.

The test case, following the Opes Prime collapse, rejected the argument put forward by Beconwood Securities, that they retained ownership of shares seized by secured creditor ANZ Bank.

Click here to view the judgment in full.

Proposed Legislation

Amendment to Corporations Act 2001 (Cth) and Australian Securities and Investments Commission Act 2001 (Cth)

The Private Health Insurance Legislation Amendment Bill 2008 (Cth) (Bill) proposes to amend both the Corporations Act 2001 (Cth) (Corporations Act) and the Australian Securities and Investment Commission Act 2001 (Cth) (ASIC Act). The Bill was introduced into the House of Representatives on 15 May 2008.

The Bill seeks to amend the Corporations Act and the ASIC Act, among others, to ensure health related businesses that are conducted through a health benefits fund remains solely regulated by the Private Health Insurance Administration Council. The Bill effectively removes APRA's regulation of such businesses and requires all private health insurers to be companies under the Corporations Act, strengthening accountability, regulation and governance.

The proposed Bill seeks to amend the Corporations Act and the ASIC Act to redefine 'financial product', to accommodate the above aims.

Click here to access the Bill.

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

Click to Login as an existing user or Register so you can print this article.

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”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
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).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.