Welcome to Edition 78 of Boardroom Brief.
This is a service specifically targeted at the needs of busy non-executive directors. We aim to give you a “heads up” on the things that matter for NEDs in the week ahead – all in two minutes or less.
YOUR KEY BOARDROOM BRIEF
ASIC publishes report on corporate finance regulation for January to June 2018. ASIC has published a report - directed at companies, lawyers, corporate advisers and compliance professionals working in corporate finance - which sets out its key observations on fundraising, mergers & acquisitions and corporate governance issues for the period from 1 January to 30 June 2018 as well as its areas of focus for the next six months. Key highlights in the Report include: (i) $6.8 billion was sought to be raised across 229 original disclosure documents, with fundraising by banks for regulatory capital purposes continuing to dominate corporate finance; (ii) there were significantly more interim stop orders issued (10.5%) compared to only 1.8% during the previous six month period; (iii) 16 transactions were launched via a takeover bid; (iv) $27.5 billion worth of total implied value of targets were subject to control transactions; and (v) $3.4 billion share buy-backs were undertaken by 110 companies. Over the next six months, ASIC will focus on monitoring: (i) the promotion of IPOs; (ii) the independence of experts (including geologists and technical specialists); and (iii) ‘last and final’ or ‘truth in takeovers’ statements by market participants. For Directors involved in, or contemplating, an IPO, takeover or similar transaction, the Report provides a helpful overview of the typical disclosure concerns ASIC raises and circumstances in which ASIC may intervene. You can read the Report here.
ASIC ‘phoenixing’ charges result in two former company director convictions. In line with ASIC’s commitment to combating phoenixing (being when a new company is created to continue the business of a company that has been deliberately liquidated to avoid paying its debts to creditors), ASIC announced last Friday that two former directors have been convicted for engaging in such activity (see ASIC’s media release). One conviction resulted in 18 months’ imprisonment. ASIC’s investigation here was prompted by a liquidator’s report – but we should anticipate an uptick in similar investigations in the future particularly in light of: (i) the establishment in July of a new confidential ‘Phoenix Hotline’ to encourage the general public to report concerns of such activity; (ii) the Government’s consultation initiated last month on reforms to strengthen the penalty regime for such activity (see exposure draft legislation and explanatory materials for more information); and (iii) the Government’s recent injection of a further $70.1 million into ASIC, generally, to bolster its enforcement capabilities.
THE WEEK AHEAD
Government’s consultation on Consumer Data Right closes this Friday. The Consumer Data Right (CDR) is intended to provide consumers with greater control over their data and will be implemented initially in the banking, energy and telecommunications sectors before being rolled out across all sectors of the economy. As previously reported in Boardroom Brief, the proposed approach to privacy requirements appears to go further than the Government previously recommended and there will no doubt be concerns as to how to efficiently implement and manage a multi-tiered privacy compliance regime (ie, managing compliance under the Privacy Act with compliance under the new privacy safeguards). See G+T insight, ‘Consumer Data Right Bill’ for more information.