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 consider ASIC’s surveillance into the marketing of managed funds and Takeovers Panel applications in relation to the affairs of Nex Metals Explorations Ltd and DRA Global Limited.

We also consider the final report released in relation to the Perth Casino Royal Commission. In Over the Horizon, we look at likely focus areas of the 2022/23 Federal Budget which is to be released on Tuesday, 29 March, and the key themes emanating from influential Blackrock CEO Larry Fink’s latest letter to shareholders.


ASIC commences surveillance into the marketing of managed fund performance and risks.  ASIC is conducting surveillance into the marketing of managed funds in order to identify the use of misleading representations relating to the performance and risks associated with the fund.  ASIC is concerned that consumers are being misled about the performance and risks of the funds they are investing in, and that retail and unsophisticated investors are being targeted with “ambiguous or misleading performance and risk representations”.  Where ASIC identifies a marketing concern, it has stated that it will be prompted to look deeper into the fund’s affairs, including reviewing its product disclosure statements, website and target market determinations to confirm whether representations made in the marketing materials are misleading.  ASIC’s Deputy Chair, Karen Chester, has confirmed ASIC’s commitment to protecting consumers from such behaviour and vowed that prompt action will be taken through the deployment of ASIC’s regulatory tools from administrative intervention to enforcement action to prevent misleading marketing in relation to a fund’s performance and risks.  See ASIC’s media release.


Takeovers Panel receives application in relation to the affairs of Nex Metals Explorations Ltd.  The saga of Metalicity Ltd (Metalicity)’s bid for Nex Metals Explorations Ltd (Nex Metals) continues, with a fifth application to the Panel by Metalicity. The Panel has made successive orders seeking to remedy what it considered material defects in Nex Metals’ takeover response.  Metalicity now submits to the Panel that the replacement target’s statement lodged by Nex Metals contains misleading and deceptive statements and does not contain all the information necessary for Nex Metals shareholders to make an informed assessment whether to accept the bid.  Metalicity further submits that the directors’ recommendation to reject the bid is “unsound and not defensible”.  Metalicity seeks orders including restraining dispatch of the replacement target’s statement, compelling Nex Metals to advise the market that the document is misleading and should not be relied upon, and that a further replacement target’s statement be issued.  See the Takeovers Panel’s media release.  While the facts of this case are unusual, the Panel has shown a willingness to adopt an activist role in transactions if it believes this is necessary to preserve an efficient market.

Takeovers Panel receives application in relation to the affairs of DRA Global Limited.  The Takeovers Panel received an application in relation to the affairs of DRA Global Limited (DRA).  The key background facts relate to resolutions put forward by certain DRA shareholders (including three members of senior management at DRA) to remove two directors of DRA and appoint four new directors nominated by the consortium.  Around this time, the consortium entered into deeds of irrevocable undertakings with a large number of shareholders holding 42.7% of DRA collectively, which amongst other things included an undertaking to vote in favour of the resolutions.  As a result of discussions with the DRA Board, the consortium withdrew its notice to hold a general meeting and put forward the director removal and appointment resolutions on the condition that DRA revert with a transition plan to give effect to changes demanded by the consortium.  The DRA Board later became aware of the undertakings and raised concerns with the consortium about potential undisclosed associations and applied to the Panel, arguing that the members of the consortium, together with select DRA shareholders, conspired to act in concert and entered into agreements to change the composition of the DRA Board in contravention of section 602 of the Corporations Act.  See the Takeovers Panel’s media release.  This presents an interesting test case as to how the Panel will respond to claims of association in the clear context of shareholder activism in relation to a listed entity

Perth Casino Royal Commission reaches an end.  A Royal Commission was established on 5 March 2021 to determine whether Crown Perth was suitable to continue to hold a casino gaming licence.  Allegations speaking to Crown Perth’s unsuitability included alleged instances of money laundering, conflicts of interest, permitting junkets with criminal associations to operate at Perth Casino, failing to minimise gambling-related harm, and failing to be transparent with the Gaming and Wagering Commission.  After almost a year of inquiries, the final report of the Royal Commission was tabled in Parliament on 24 March 2022 - ultimately finding that Crown Perth (and associated entities) is not suitable to continue to hold the gaming licence for Perth Casino.  The Commission has made several remediation recommendations and has acknowledged steps that have already been taken to prevent further failures.  Crown Perth will continue to hold its casino licence, while undergoing a two-year remediation period under an independent monitor.  Notably, the Commission also commented that certain State departments should bear some responsibility for the findings detailed in the report.  See the Commission’s final report.


Federal Budget to be released on 29 March 2022.  The 2022/23 Federal Budget will be released tomorrow - just weeks before the Federal election is called, making its measures particularly impactful on the future composition of government.  The Budget will reflect the impact of numerous crises, including the ongoing COVID-19 pandemic, unprecedented flooding in NSW and Queensland, the Russia-Ukraine conflict, and the impacts of resulting supply chain disruptions on inflation, interest rates and fuel prices.  We can expect increased funding to be directed towards national security, from bolstering Ukraine with military supplies, to increasing Australia’s military and digital security in light of increased security risks, as well as financial aid to be provided to those affected by recent flooding.  The Treasurer has promised that measures will be taken to alleviate mounting cost-of-living pressures, suggesting possible reform could include more tax offset lump sum payments, increased childcare subsidies and potentially reducing the tax levy imposed on fuel (which is currently set at 44.2 cents per litre).  The Government will need to strike a delicate balance between producing an ”election-friendly” budget while avoiding over-stimulating the economy in the midst of an inflationary environment.  The Budget will be released here at around 5:30pm (AWST) on Tuesday, 29 March, and you can tune into Gilbert + Tobin’s live webinar at 10:00am (AWST) on Wednesday, 30 March for a summary of the Federal Government’s key Budget initiatives by registering to attend.

Fink calls the end of multi-decade globalisation trend.  In his annual shareholder letter, influential Blackrock CEO Larry Fink suggests that the war in Ukraine will bring to an end three decades of globalisation in world capital markets.  He calls out the three key trends that will determine corporate destinies in the immediate future: deglobalization, inflation and the energy transition, all of which are likely to prompt decisions to onshore or “nearshore” more of their operations.   Interestingly, Fink also believes the current geopolitical and economic setting will accelerate the transition to clean energy in the short term, while also prompting more widespread adoption of digital currencies.