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In this edition, we discuss the infringement notices issued by the Australian Securities and Investments Commission (ASIC) to Black Mountain Energy Limited and Diversa Trustees for greenwashing.  We also examine the legislative instrument made by ASIC in relation to employee share schemes, the $450,000 penalty issued by the Federal Court to Australian Mines Limited for breaches of continuous disclosure obligations, and the Takeovers Panel’s declaration of unacceptable circumstances in relation to the affairs of Mineral Commodities Limited.

In Over the Horizon, we consider the outlook for the Australian market in 2023, which is set to heavily feature energy, resources and ESG.

This is the first edition of Boardroom Brief for the year.  It covers key developments since 12 December 2022.


ASIC issues “Greenwashing” infringement notices. We have previously noted that ASIC is likely to prioritise anti-Greenwashing enforcement actions in the current financial year.  Recently, ASIC took action in two very different factual scenarios.  On 23 December 2022, ASIC announced that Diversa Trustees Limited (Diversa) paid $13,320 to comply with infringements notices issued by ASIC in relation to alleged Greenwashing.  ASIC was concerned that statements on the website of Cruelty Free Super, which is issued by Diversa, may have been false or misleading by overstating exclusions or investment screens.  Cruelty Free Super claimed to prevent investments in companies involved in ‘polluting and carbon intensive activities’, ‘financing or support of activities which cause environmental or social harm’ and ‘poor corporate governance’.  ASIC Deputy Chair Sarah Court stated that ASIC was concerned that the statements were too broad and were potentially misleading.  See ASIC media release.   Then, on 5 January 2023, ASIC announced that Black Mountain Energy Limited (BME) paid $39,960 to comply with three infringement notices issued by ASIC in relation to concerns about false or misleading sustainability-related statements.  The infringement notices related to statements made by BME to the ASX between 23 December 2021 and 8 September 2022 in which BME claimed that it was creating a natural gas development project with ‘net-zero carbon emissions’, and that the greenhouse gas emissions associated with the project would be net zero.  ASIC was concerned that the representations were factually incorrect, or that that BME did not have a reasonable basis to make them.  See ASIC media release.  While these are isolated incidents and the monetary penalties are not particularly significant, we do expect further enforcement action of this kind partly with a view to providing “guiderails” to the market as to the kind of conduct with which ASIC may take issue.

ASIC makes instrument facilitating employee share schemes.  On 20 December 2022, ASIC announced that it made a legislative instrument seeking to remove unintended technical issues causing practical difficulties with employee share schemes (ESS).  The instrument provides a broader exemption for secondary sales of financial products that are quoted on a financial market, more options for the financial information that foreign companies can provide ESS participants, and the ability to provide an expert valuation of ESS interests that are not ordinary shares. Further, the instrument provides technical relief so that salary sacrificing arrangements can comply with the requirements for contribution plans, and clarifies that financial products offered outside Australia do not need to be included when calculating the issue cap in section 1100V of the Corporations Act 2001 (Cth).  The ESS regime will replace ASIC’s existing relief in Class Orders [CO 14/1000] Employee Incentive Schemes: Listed bodies and [CO 14/1001] Employee Incentive Schemes: Unlisted bodies, and entities will be unable to make new offers under these class orders from 1 March 2023.  See ASIC media release.


Federal Court issues $450,000 penalty to Australian Mines Limited for continuous disclosure breaches.  On 13 January 2023, the Federal Court handed a $450,000 penalty to Australian Mines Limited (AML) for breaching its continuous disclosure obligations on three occasions.  AML failed to disclose that the term sheet for an offtake agreement relating to the purchase of the expected cobalt and nickel from AML’s Sconi Project included a 15% discount to the buyer upon acquiring shares in AML at a fixed price.  Further, it failed to disclose the true status of funding for the Sconi Project after its managing director falsely claimed at investor conferences that AML had secured funding for the Project, when in fact no funding had been secured.  Lastly, AML failed to properly disclose the true value of the offtake agreement by reference to the 15% buyer discount.  ASIC Commissioner Sean Hughes stated that the decision ‘is a timely reminder for ASX listed companies attending overseas conferences that compliance with the law is expected and enforceable’.  See Australian Securities and Investments Commission v Australian Mines Limited [2023] FCA 9 and ASIC media release.  Directors, in particular, need to ensure that there is appropriate oversight of management in relation to conference and seminar presentations, and potentially be alert to the need for clarificatory disclosure to ASX if necessary to correct any misleading statements.

Takeovers Panel makes declaration of unacceptable circumstances in relation to the affairs of Mineral Commodities Limited.  On 20 January 2023, the Takeovers Panel published its reasons for its decision to make a declaration of unacceptable circumstances in relation to the affairs of Mineral Commodities Limited (MRC).  The application concerned a share placement by MRC to Au Mining Limited (Au Mining), MRC’s largest shareholder, and a pro rata non-renounceable rights issue by MRC that was partially underwritten by Au Mining and two of MRC’s directors.  Relevantly, one of those directors was a nominee of Au Mining, and also Au Mining’s company secretary (although that director did not hold any shares in MRC or Au Mining).  The Panel considered that the placement and the rights issue could potentially result in Au Mining acquiring control or potential control of, or a substantial interest in, MRC in a way that is contrary to an efficient, competitive and informed market.  The Panel’s decision reminds market participants of the importance of adequate disclosure and management of conflicts between duties, and that failure to appropriately structure a transaction exposes the entity to challenge before the Panel.  See Mineral Commodities Limited 02 [2022] ATP 24.


Energy, resources and ESG set to feature heavily in Australian market in 2023.  The energy and resources sectors are likely to remain buoyant throughout 2023, with continued pressure on global oil and gas markets due to geopolitical instability, and demand for critical minerals continuing to grow due to the global renewable energy transition.  M&A activity in the energy and resources sectors, including technology-focussed acquisitions, was strong in 2022, and we expect that trend to continue throughout 2023.  Further, as the disclosure of climate-related financial risk becomes more prevalent (and may become mandatory – see G+T Knowledge article), it will also become easier to scrutinise corporate behaviour and ESG risk.  As a result, we expect that forward-looking assessments of ESG risks, including in a target’s supply chains, and associated reputational risks will regularly feature in M&A due diligence processes.  It will be common for ESG factors to be integrated into transaction processes, even where they are not necessarily the driving force behind a deal.

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