This is a service specifically targeted at the needs of busy non-executive directors (NEDs). 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 discuss a speech by Australian Securities and Investments Commission (ASIC) Commissioner Mr Alan Kirkland summarising the regulator’s focus amidst a changing regulatory environment, and the release of a report by the Australian Competition and Consumer Commission (ACCC) revealing a lack of visibility for consumers in relation to data collection practices. Further, we examine an application received by the Takeover Panel in relation to the affairs of Metallica Minerals Limited (ASX: MLM) (Metallica).

In Over the Horizon, we examine the launch of the Federal Government’s National Battery Strategy and its potential implications for industry.

Governance 

ASIC Commissioner summarises regulator’s focus amidst changing regulatory environment 

On 23 May 2024, ASIC Commissioner Mr Alan Kirkland presented a speech at the Australian Finance Industry Association Risk Summit outlining the regulator’s priorities in a global environment featuring cost-of-living pressures, climate change risks and rapid technological advancements (among other things). Mr Kirkland indicated that ASIC is supporting vulnerable consumers by ensuring that lenders appropriately address cases of financial hardship, combating high-cost credit, predatory lending and unlicensed credit activities, and ensuring that credit products meet design and distribution obligations. More broadly, the regulator is focused on issues around climate change and sustainable finance, technological change and digitally enabled misconduct (including digital scams), artificial intelligence and cybersecurity. ASIC expects that directors actively consider their organisation’s exposure and response to these evolving regulatory issues. See ASIC media release.

ACCC report exposes lack of visibility for consumers in relation to data collection practices

On 21 May 2024, the ACCC released its latest Digital Platform Services Inquiry report which reveals that consumers are unaware of the extent to which their data is collected, used and shared by data firms. The report notes that consumers usually have no choice but to accept privacy policies that are long and complex and that it is difficult for them to understand or control what happens to their data once it has been collected. This is particularly concerning given that the importance of data continues to grow with the rise of artificial intelligence. While the report does not make any new recommendations to the government, it provides further evidence to support the ACCC’s recommendation to introduce a prohibition on unfair trading practices and strengthen privacy laws in Australia. See ACCC media release.

Legal

Panel receives an application in relation to the affairs of Metallica

On 21 May 2024, the Panel announced that it had received an application from Diatreme Resources Limited (ASX: DRX) (Diatreme) in relation to the affairs of Metallica. On 30 October 2023, Metallica and Diatreme entered a confidentiality deed which contained a mutual standstill provision restricting Diatreme from acquiring, purchasing or selling securities in Metallica without Metallica’s prior written consent. On 16 February 2024, Diatreme announced its intention to make a takeover bid for Metallica. Diatreme subsequently included a condition to its bid requiring the waiver of the standstill. On 24 April 2024, Metallica released its target’s statement which stated that the directors of Metallica unanimously recommended the rejection of the offer and indicated their intention to waive the standstill condition by having Metallica sign a deed poll in favour of Diatreme which would take effect if a superior proposal does not eventuate or, having eventuated and being subject to Metallica shareholder approval, is not approved by Metallica shareholders. Metallica gave Diatreme an executed copy of the deed poll on 8 May 2024. On 10 May 2024, Metallica announced that it was in discussions with third parties regarding potential alternative transactions. On 21 May 2024, Diatreme announced that it had acceptances which took its voting power to over 56% in Metallica. By its application, Diatreme submits that (among other things) it is incumbent on Metallica to update its shareholders about the likelihood of a competing proposal for Metallica given Diatreme’s voting power, and that it is unacceptable for the standstill not to be released immediately. A sitting Panel has not been appointed and no decision has been made on whether to conduct proceedings. See Takeovers Panel media release.

Over the Horizon

Federal Government announces plan to empower Australia’s battery future

On 23 May 2024, the Australian Federal Government unveiled its National Battery Strategy (Strategy) in a bid to enhance Australia’s economic resilience and leverage Australia’s ‘unmatched’ reserves of battery minerals amid surging global battery demand – demand which is set to quadruple by 2030 as the world doubles down on its efforts to transition to net zero. The Strategy is a key pillar of the Federal Government’s Future Made in Australia package, and envisions Australia cementing itself as a key, globally competitive producer of batteries and battery materials by 2035. Backed by a circa $523 million budget, the Strategy outlines five key priorities: 

1. build battery manufacturing capabilities that strengthen economic resilience;
2. build knowledge and skills to create secure Australian made jobs; 
3. secure Australia’s place in global battery supply chains;
4. lead the world on sustainability, standards and the circular economy; and
5. bring all levels of government together. 

The Strategy is aimed at Australia becoming a ‘renewable energy superpower’ by ‘moving beyond a dig and ship economy’ towards a ‘mine and make’ model. See National Battery Strategy. However, given the significant barriers to entry in the industry, it is unclear exactly how Australia will be able to seize a meaningful position in the battery supply chain. See article.