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Bentley Capital Limited 01R – Review Panel Accepts Undertakings and Declines to Make a Declaration of Unacceptable Circumstances

by Martha.Ware 7. July 2011 09:04

The review Panel has accepted undertakings from the Chairman of Bentley Capital Limited, Mr Farooq Khan, and Database Systems Limited (DBS) and Mrs Ambreen Chaudhri and has declined to make a declaration of unacceptable circumstances in response to an application dated 24 May 2011 by Bellwether Investments Pty Ltd and Mr Jim Craig in relation to the affairs of Bentley.

The applicants submitted that Mr Khan, his sister, Mrs Chaudhri and her husband, Mr Chaudhri, and their controlled entities were associated in relation to acquisitions of Bentley shares in 2009 and 2011. The initial Panel declined to make a declaration of unacceptable circumstances. The applicants sought a review of the initial Panel's decision.

The review Panel decided to consider only whether these parties were associated in relation to acquisitions in April 2011 and treated the acquisitions and circumstances in 2009 as part of the factual matrix. The review Panel did not consider whether the acquisitions and circumstances in 2009 constituted unacceptable circumstances, including because they occurred too long ago and noting the provisions in the legislation promoting prompt resolution of disputes before the Panel.

In light of the additional evidence provided to the review Panel, it considered that the acquisition of approximately 8% of the shares in Bentley by DBS in April 2011 resulted in a person’s voting power in Bentley increasing otherwise than as permitted by Chapter 6 because:

• Mr Khan, Mrs Chaudhri and DBS were associated in relation to the affairs of Bentley and

• Mr Chaudhri and Mrs Chaudhri were associated in relation to the affairs of Queste Communications Ltd.

However, in light of the undertakings submitted by Mr Khan, DBS and Mrs Chaudhri, the review Panel has declined to make a declaration of unacceptable circumstances in relation to the affairs of Bentley.

The review Panel is satisfied that the terms of the undertakings adequately address the unacceptable circumstances.

In essence, the terms of the undertakings:

1. require the associated parties to lodge substantial holder notices disclosing the nature of their association and their voting power

2. allow Bentley shareholders (excluding the associated parties, Queste and Orion Equities Limited) to consider, and if thought appropriate, to approve the acquisition of shares in Bentley by DBS on or about 7 April 2011 (Breach Shares) pursuant to Item 7 of s 611

3. if Bentley shareholders fail to approve the acquisition of the Breach Shares, require those shares to be offered to Bentley shareholders (excluding the associated parties, Queste and Orion) and

4. require any remaining Breach Shares to be sold under the supervision of ASIC.

The review Panel did not consider it against the public interest to accept the undertakings and to decline to make a declaration of unacceptable circumstances.

The sitting Panel was Ewen Crouch, Robert Johanson and Ian Ramsay (sitting President).

The review Panel will publish its reasons for the decision in due course on its website www.takeovers.gov.au.

Tags:

Takeovers and Reconstructions



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