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The Department of Home Affairs has issued its draft guidance “Modern Slavery Act 2018: Draft Guidance for Reporting Entities” (Draft Guidance) for the new Modern Slavery Act 2018 (Cth) (the Act).
There have been a number of recent cases which have illustrated the readiness of the Federal Court to protect the interests of the shareholders as well as the integrity of the market in situations where shares have been issued and on-sold with defective disclosure.
Colvin J (who heard both cases) emphasised that in cases like these, the Court’s key concerns are:
In both cases, Colvin J granted orders under section 1322(4) of the Act validating the subsequent sale of those shares within 12 months of their issue in breach of the on-sale restrictions in the Act, and protecting those shareholders from potential civil liability.
His Honour declined to make such orders in relation to certain Poseidon institutional investors (finding that such relief should be considered if and when they seek relief on their own behalf). However, Colvin J did find that the position in relation to those investors was materially different because a higher standard applies to experienced parties like them who should be aware of the disclosure requirements and should have made enquiries to ensure that such requirements had been met.
In finding a lack of ‘dishonesty’ as required under section 1322(6)(ii), Colvin J found that: