In this edition, we discuss guidance for 'buy now, pay later' providers released by the Australian Securities and Investments Commission (ASIC) ahead of the introduction of a new regulatory regime in June 2025 and the penalty imposed by the Federal Court of Australia on HCF Life Insurance Company Pty Limited (HCF Life) for misleading insurance contract terms. We also cover a recent application to the Takeovers Panel concerning the proposed delisting of Pact Group Holdings Ltd (ASX: PGH) (Pact Group) and the Panel’s decision to decline to conduct proceedings on a review application from Emu NL (ASX: EMU) (Emu).
In Risk Radar, we discuss the governance implications of a timely reminder from ASIC in relation to ensuring appropriate management of company funds and assets.
Regulatory
ASIC issues guidance for buy now, pay later providers ahead of new regulatory regime
On 8 May 2025, ASIC released Regulatory Guide 281: Low cost credit contracts to assist buy now, pay later providers in preparing for the introduction of new laws that will come into effect on 10 June 2025. The guidance clarifies compliance obligations, including modified responsible lending requirements, as the National Credit Code will be extended to cover buy now, pay later contracts. ASIC has urged providers to secure the appropriate credit licences to avoid engaging in unlicensed conduct under the new regime.
Legal
Federal Court imposes penalty on HCF Life for misleading insurance contract terms
On 8 May 2025, the Federal Court of Australia ordered HCF Life to pay a $750,000 penalty and issue corrective disclosure on its website after finding that the “pre-existing conditions term” used in certain policies was misleading to consumers. Justice Jackman determined that the term, which attempted to exclude liability that could not be excluded under section 47 of the Insurance Contracts Act 1984 (Cth), was liable to mislead policyholders about their rights and the extent of their cover, even though HCF Life did not intend to deceive. This case underscores the importance of ensuring that consumer contracts or disclosure statements are accurate and comply with statutory requirements.
Takeovers Panel receives application in relation to the affairs of Pact Group
On 9 May 2025, the Panel announced it had received an application from Mr Jeremy Machet and Scrap Invest Pty Ltd in relation to the affairs of Pact Group. The application concerns Pact Group’s delisting from the ASX and the applicants submit, among other things, that:
Pact Group shareholders are being pressured into selling at depressed prices or holding illiquid unlisted shares.
The notice of meeting lacks balanced information and allows Bennamon Industries Pty Ltd, Kin Group Pty Ltd and Salvage Pty Ltd (the Major Shareholders) to exercise their 88% holding to vote for Pact Group’s delisting, while being in a beneficial position to acquire additional shares.
Pact Group is misleading shareholders about its fair value and prospects by disclosing negative information (for example, a concentrated share register and listing costs) and downplaying positive developments (for example, revenue normalisation, ongoing debt refinancing and potential divestments), which is in turn influencing shareholders’ decision on the delisting.
The applicants submit that these circumstances are unacceptable as they facilitate the Major Shareholders’ consolidation of ownership in contravention of Chapter 6 of the Corporations Act. A sitting Panel has not been appointed and no decision has been made whether to conduct proceedings.
Takeovers Panel affirms decision to decline to conduct proceedings on review application from Emu NL
As reported in a previous edition of Boardroom Brief, on 23 April 2025, the Takeovers Panel received a review application from Emu seeking a review of the Panel’s initial decision on 17 April 2025. That decision was to decline to conduct proceedings on Emu's application in relation to alleged associations among shareholders aiming for majority control of the Board through a spill meeting. The Panel found insufficient material to justify further inquiries into the alleged association. On 6 May 2025, the Panel affirmed its original decision, declining to conduct proceedings on Emu’s application for review. The Panel found that Emu had not provided evidence sufficient to justify further enquiries and had not set out the relevant circumstances in a sufficiently clear manner. The Panel was not satisfied that there was a compelling case of association based on the provided material and concluded that there was no reasonable prospect of the Panel making a declaration of unacceptable circumstances.
Risk Radar
Director accountability under the microscope
On 12 May 2025, ASIC issued a timely reminder to directors of small businesses (including personal investment and family companies) about their obligations to appropriately manage company funds and assets. ASIC’s reminder stresses that directors must act in good faith, avoid using company resources for personal benefit and ensure proper financial oversight or risk personal liability and regulatory action. While aimed at smaller entities, the principles resonate across the corporate spectrum. In recent months, several high-profile governance failures in major Australian companies have dominated headlines, exposing the financial and reputational consequences of blurred lines between personal and corporate interests. The lesson from ASIC is clear: corporate size is no shield from accountability (and perhaps, the larger the company, the larger the fall from grace). Directors, whether of a family, startup or a listed entity, must remain vigilant in fulfilling their fiduciary duties. Boards are urged to reinforce their governance frameworks, challenge management where appropriate and ensure there are clear boundaries between company and personal use of funds or assets. This is a moment to re-evaluate internal controls, promote a culture of ethical leadership and remember that governance failures rarely start as wrongful acts: indeed, they often begin with unchecked assumptions and unchallenged decisions.