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. 

In this edition, we examine the association between Chinese bidders and FIRB’s deal rejections over the past five years, ASIC’s extension of financial reporting deadlines for unlisted entities, the release of draft legislation on franked distributions and capital raisings, and the Federal Court’s orders against two companies and their sole directors for engaging in cartel conduct.

In Over the Horizon, we consider the increasingly disruptive effects of corporate climate activism as the world transitions to net zero.


Chinese bidders involved in all FIRB deal rejections in the past five years.  According to analysis released by Mergermarket on 13 September 2022, bidders from Hong Kong and/or mainland China were connected to all six Australian inbound M&A deals that were rejected by the Foreign Investments Review Board (FIRB) over the past five years.  The data analysis and market news service also reports that the volume and proportion of Chinese bids for Australian companies has fallen dramatically over the same period.  Between 2017 and 2021, the number of Australian inbound M&A deals decreased by 18%, and the number of deals involving bidders from mainland China and Hong Kong plummeted by 81%.  However, FIRB has not blocked all bids featuring Chinese bidders during this period.  Six bids for Australian companies that were conditional on FIRB approval were cleared by the agency, and one further bid was conditionally cleared.  Despite this, the prevalence of deal rejections is likely to signal to investors that it is increasingly difficult to distinguish between the Australian Government’s concept of national security and the national interest.

ASIC extends financial reporting deadlines for unlisted entities.  On 9 September 2022, the Australian Securities and Investments Commission (ASIC) registered ASIC Corporations (Amendment) Instrument 2022/719 (Instrument 2022/719) which amends a number of existing ASIC instruments and implements temporary measures to assist unlisted entities affected by the impacts of COVID-19.  Specifically, the effect of Instrument 2022/719 is to extend the deadline by one month for:

  • unlisted entities to lodge financial reports with ASIC and report to members for financial years and half-years ending between 24 June 2022 (inclusive) and 7 July 2022 (inclusive);
  • wholly owned companies that enter into deeds of cross guarantee with their parent entity to lodge certain documents with ASIC in order to obtain relief under ASIC Corporations (Wholly-owned Companies) Instrument 2016/785 from preparing and lodging financial statements; and
  • public companies (other than listed public companies) with financial years ending between 24 June 2022 (inclusive) and 7 July 2022 (inclusive) to hold their annual general meetings.

Franked distributions and capital raising draft legislation released for public consultation.  On 14 September 2022, the Commonwealth Government released exposure draft legislation for public consultation with a view to amending the Income Tax Assessment Act 1997 (Cth) to make certain distributions funded by capital raising unfrankable.  The amendments seek to give effect to integrity measures announced in the 2016-17 Mid-Year Economic and Fiscal Outlook by preventing entities from obtaining inappropriate access to franking credits.  A distribution will be caught by the draft legislation where it is made outside or additional to a company’s normal dividend cycle, and that distribution is funded (directly or indirectly) by capital raising activities that result in the issue of new equity interests.  The consultation period will close on 5 October 2022.  See Treasury consultation page.


Federal Court orders two businesses and their directors to pay $420,000 in penalties for cartel conduct.  On 14 September 2022 the Federal Court ordered First Class Slate Roofing Pty Ltd (First Class), RAD Roofing Specialists Pty Ltd (trading as Mr Shingles), and each company’s sole director to pay penalties totalling $420,000 for engaging in cartel conduct.  The proceedings, brought by the Australian Competition and Consumer Commission, were concerned with the companies engaging in bid rigging in relation to tenders for two slate roofing projects in 2019.  This conduct involved Mr Shingles submitting a higher bid price in exchange for payment from First Class, with the purpose of making First Class more likely to win the tender for the first project.  With respect to the second project, First Class submitted a higher bid price in exchange for payment from Mr Shingles.  The Federal Court ordered First Class and its director to pay penalties of $280,000 and $60,000 respectively, and Mr Shingles and its director to pay penalties of $65,000 and $15,000 respectively.  The Federal Court also ordered that each company be subject to an injunction restraining them from engaging in bid rigging conduct for the supply, installation, maintenance or repair of roofing for three years.  Further, the Federal Court ordered the directors to publish an educative notice to members of the Roofing Industry Association of NSW Incorporated about their unlawful conduct, and to participate in competition law education or training programs.  See ACCC media release and Australian Competition and Consumer Commission v First Class Slate Roofing Pty Limited [2022] FCA 1093. Directors should note the potential for the Court to “pierce the corporate veil”, through the imposition of penalties on directors personally, in cases of competition misconduct.


Corporate climate activism to become increasingly disruptive.  Climate change and decarbonisation have become key considerations for Boards to evaluate when assessing the strategic direction of their companies.  However, external stakeholders hoping to drive positive environmental change are increasingly seeking new, and occasionally disruptive, ways to obtain greater transparency on these issues.  For example, shareholder resolutions seeking to increase financial disclosures around achieving decarbonisation targets, or to encourage a more active role in promoting climate change-related policies, are becoming more prevalent.  There has also been an increase in activist groups and protestors disrupting annual general meetings with climate-related demonstrations around the world, sometimes resulting in substantial negative international media coverage (for example, Shell and TotalEnergies’ 2022 annual general meetings).  As the AGM season approaches, Directors of companies which may be the subject of activist intervention, will need to consider their protocols for dealing with disruption, either in the form of protest resolutions or indeed, physical protests or disruptions.  This may include tighter controls on those being permitted to attend AGMs in person and a requirement for questions to be submitted in writing in advance, so they may be ruled on by the Chair.   

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