29. October 2010 11:16
The Centre for Corporate Law and Securities Regulation at the University of Melbourne has established a new section of its website dealing with the history of Australian corporate law. The section is a free resource, providing links to key documents in the history of Australian corporate law (it also includes relevant UK documents). The site also provides brief summaries of some of the key documents, in a useful chronological structure.
Professor Ian Ramsay, director of the CCLSR, is also a co-author of Ford's Principles of Corporations Law.
28. October 2010 12:19
The Chartered Secretaries Association, in a media release issued earlier today, has highlighted corporate governance concerns regarding the prospective merger of ASX with SGX:
No stakeholder group would disagree with the claim that Australia’s governance framework is fundamentally different from and better than it was seven years ago as a result of the ‘if not, why not’ regime that the [ASX Corporate Governance] Council has put in place. Investors have access to much more information which they use to judge how well the company is run. Board decision making is much more transparent. And using the ‘if not, why not’ approach allows companies to tell their story to investors, so that they have access to the thinking behind decisions. If companies don’t want to tell their story, then investors can vote with their feet.
ASX currently plays an essential role in supporting the work of the Corporate Governance Council. It provides very senior people to chair the Council and assist its ongoing review of the efficacy of the guidelines in changing behaviour. The Council has the backing of ASX’s compliance arm in monitoring and enforcing compliance with the relevant listing rule. A key question is where the supervision of disclosure against the [ASX Corporate Governance] Principles and Recommendations will sit after the merger. If this goes offshore, what does that mean for the corporate governance framework here? And with SGX also having a code of corporate governance in place, operating on a 'comply or explain' principle (which, while basically the same as the 'if not why not' approach, includes key differences) will the merged entity want two codes operating or seek to amalgamate them? Who will be consulted if this is the favoured approach? Australia does not have a tradition of requiring boards of regulated market operators to have ‘public interest’ directors. But there are questions of public interest at play here, and it remains unclear who will address them. Yet these questions must be addressed. While the commercial benefits of the proposed merger are apparent, they should not compromise the integrity of the market.
27. October 2010 16:35
In a submission to the Senate Legal and Constitutional Affairs Committee, the Federal Court has flagged its serious concerns with the reforms proposed in the Civil Dispute Resolution Bill 2010.
Although the Committee's report is not due until 22 November 2010 (today is the closing date for submissions), submissions already received are publicly available.
In short, the court is concerned that the reforms as set out in the Bill :
- are neither necessary nor desirable;
- are not suitable for the nature of much of the court's work;
- will increase costs and delays without corresponding benefit;
- run the risk of creating satellite litigation - litigation about litigation; and
- employ terminology which may be in conflict with the case management principles implemented in the Access to Justice (Civil Litigation Reforms) Act 2009, and case management reforms introduced in state jurisdictions.
The submission also points out that the operation of the reforms in a personal or corporate insolvency context is unclear.
The submission proposes an alternative approach of enacting legislation requiring a party contemplating litigation to serve a short statement outlining the factual and legal basis of its claim upon a potential respondent. If that step were taken, the court could then be given jurisdiction over ADR of the matter and the parties would be able to access court-annexed mediation (which is generally cheaper than external mediation, and integrated with existing case management powers).
27. October 2010 16:18
Mary MacKillop was first recognised by the Vatican, now by the Governor-General – the Corporations Amendment Regulations 2010 (No. 8) were registered today, and commence tomorrow.
Their stated purpose is “to protect the name of Mary MacKillop from commercial exploitation by individuals or corporations who have no connection to her.” They amend Sch 6 para 6203, which sets out the names which will be deemed unacceptable for registration by ASIC for the purposes of s 147(1)(c) or s 601DC(1)(c) of the Corporations Act.
26. October 2010 10:55
Vol 26 No 4 of our newsletter, Australian Banking and Finance Law Bulletin is now online.
We note in particular the article by Dr Mick Young, Henry Davis York, "Configuring catastrophe bonds: the science behind surprise":
The worst of the global financial crisis appears to be subsiding. Given the ongoing uncertainty in international credit markets, however, the full extent of the impact of the crisis in the years ahead remains unclear and conditions in the financial markets will, at the very least, remain challenging for the foreseeable future. Yet the market disruption has helped to re-enforce a basic rule of investing that was overlooked by many when financial markets were booming: the need to offset risk through the diversification of investments. Today, many international investors are looking for alternative investment vehicles to diversify their holdings to help shield them against future market shocks. The capacity of the capital markets to offer investors a rich portfolio of risk management strategies potentially holds the keys to this protection. [full article]
25. October 2010 12:57
As has been extensively reported (SMH summary of merger, summary of ACCC position), the ASX and the SGX have announced this morning that they have entered into a merger implementation agreement. The agreement will be effected by scheme of arrangement, with SGX acquiring all issued ordinary shares in ASX. Associated shareholder meetings and court hearings are anticipated to occur in the first half of 2011.
The combined exchange group, ASX-SGX Limited, will have pro forma revenues of approximately US$1.1 billion and pro forma earnings before interest and income tax of approximately US$700 million, based on the audited financial statements of ASX and SGX, each for the financial year ended 30 June 2010.
The two exchanges will maintain their current branding, and will be locally regulated and legally distinct.
The full media release is available on the ASX site.
25. October 2010 12:09
The October 2010 issue of our newsletter Inhouse Counsel is now online.
Subscribers' attention is drawn to the following articles:
22. October 2010 15:44
The country's leading scholar of corporations law, Harold Ford, celebrated his 90th birthday on 14 October.
Professor Ian Ramsay, now one of the co-authors of Ford's Principles of Corporations Law, has published a paper to mark the occasion—"Professor Harold Ford and the Development of Australian Corporate Law".
The paper is in two parts—the first summarises Professor Ford's career and substantial contribution to corporate law teaching and reform, and the second is an interview (also by Professor Ramsay), spanning a range of topics such as Professor Ford's experience of teaching company law at the University of Melbourne, influences for his important books in the areas of corporate law, securities regulation and unincorporated non-profit associations, and his work for several law reform bodies.
Professor Ford reaches a pithy conclusion: "Company Law has often developed as a legislative reaction to some newly perceived commercial mischief, usually after some spectacular corporate failure. Its further development is unlikely to be different. As Justice Oliver Wendell Holmes Jr said: ‘The life of the law has not been logic: it has been experience.’”
We recommend reading the complete paper.
22. October 2010 13:36
We note the piece in today's Australian Financial Review, "Whither the Takeovers Panel?". It's an illuminating interview with three prominent takeovers lawyers, David Friedlander of Mallesons Stephen Jaques, Tony Damian of Freehills, and Guy Alexander of Allens Arthur Robinson. The full transcript is also available on the AFR site (subscription required).
The three have some interesting things to say about oversight of schemes of arrangement:
- "Courts are handling schemes well and objectors can get dealt with relatively quickly." (Damian)
- "It is quite difficult for a court to get across all the commercial issues unless you have a small group of judges who look at this all the time. We are lucky we have some very experienced judges but we have a lot of others with a million other things in their expertise." (Friedlander)
- "It is a superficially attractive argument to say the panel should be put in place of the court, but the role of the court in relation to a scheme is quite different to the role of the panel." (Alexander)
The interview is worth a read, as a snapshot of issues in the current regulation of mergers and acquisitions and the likely road ahead.
Guy Alexander writes a chapter on schemes of arrangement for our work Takeovers and Reconstructions.
19. October 2010 11:44
The 15 October 2010 issue of BCLB is now online.
We note in particular the article by Chris Kintis of crisp legal, regarding the recent Senate Economics Committee report into the insolvency industry:
The Report clearly calls for significant reform of the regulatory framework under which insolvency practitioners operate. The Committee’s highly critical tone and bi-partisan approach in support of the proposed changes suggests that the industry is likely to come under some close scrutiny, and will have to give serious consideration to the recommendations. The important question now becomes how such reforms will impact the industry in the longer term, and how the industry will react to the sweeping changes proposed.