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In this edition, we discuss the guide published by the Australian Institute of Company Directors (AICD) to assist organisations to prepare for mandatory climate reporting, and the guidance published by the Australian Securities and Investments Commission (ASIC) and the Australian Prudential Regulation Authority (APRA) to assist industry in relation to the implementation of the Financial Accountability Regime (FAR).  We also examine the decision of Black J in Re InvoCare Limited [2023] NSWSC 1180 which contains further guidance on the evidentiary requirements for schemes of arrangement, and the Takeovers Panel’s declaration of unacceptable circumstances in relation to the affairs of Bullseye Mining Limited (Bullseye).

In Over the Horizon, we discuss the effectiveness of government subsidies for clean energy and critical minerals projects during the clean energy transition.


AICD releases guide to assist organisations to prepare for mandatory climate reporting.  On 4 October 2023, the AICD released a publication titled “A director’s guide to mandatory climate reporting” (Guide) which aims to assist organisations to prepare for the introduction of mandatory climate-related disclosures.  The Guide provides background to the mandatory climate reporting landscape, discusses the duties and expectations placed on directors, and provides practical guidance on the steps that organisations can take to meet their obligations under the proposed mandatory climate reporting framework.  ASIC Chair Mr Joe Longo states in the foreword to the Guide that “[t]he most successful and resilient companies will look at mandatory climate reporting not as a compliance exercise, but as an opportunity to demonstrate how they are building long-term value”.  See AICD media release.


ASIC and APRA publish guidance to assist industry to implement the FAR.  On 3 October 2023, ASIC and APRA published an information package aimed at supporting the financial services industry in implementing the FAR.  The information package consists of the Joint Administration Agreement between the two regulators, which sets out the framework within which they will jointly administer the FAR, and a joint information paper providing guidance for authorised deposit-taking institutions on transitioning to the FAR.  As discussed in a G+T Corporate Advisory Update, the FAR will come into force for the banking industry on 15 March 2024 and for the superannuation and insurance industries on 15 March 2025.  ASIC Deputy Chair Ms Sarah Court stated that the regulators “believe the regime will increase transparency and accountability in financial firms and help embed a culture of accountability for misconduct at an individual level”.  See ASIC media release.


Supreme Court of New South Wales discusses evidentiary requirements for schemes of arrangement.  On 29 September 2023, the Supreme Court of New South Wales published the reasons for Black J’s decision in the first scheme hearing in relation to the scheme of arrangement pursuant to which Eternal Aus BidCo Pty Ltd proposes to acquire InvoCare Limited (ASX: IVC) (InvoCare).  Justice Black granted InvoCare relief from the requirement to publish a notice of the hearing of the application for approval of the scheme of arrangement in a daily newspaper, and permitted InvoCare to provide notice of the second court hearing by an announcement on the Australian Securities Exchange (ASX) and its own website.  His Honour considered that this approach was appropriate, and declined to address “any wider debate” arising from the decision of Jackman J in Re Vita Group [2023] FCA 400 (discussed in a previous edition of Boardroom Brief) and the subsequent reservations expressed by Perram J in Re Tesserent Ltd [2023] FCA 969 (also discussed in a previous edition of Boardroom Brief).  Justice Black further noted that the disclosure of shareholder communications has become a matter of “unexpected controversy” in case law.  His Honour clarified that court approval of these communications should be sought if a supplementary explanatory statement is proposed to be sent to scheme securityholders, but case law does not require the court’s approval of scripts for addressing incoming calls from shareholders.  Justice Black further commented that the disclosure of a scheme company’s intended communications with shareholders at a first court hearing is an “expectation” of the court, rather than a “requirement”.  However, Black J also observed that, if a scheme company fails to disclose these intended communications at the first court hearing, the court will consider whether the content of the communications undermined the integrity of the scheme process when determining whether to approve the scheme at the second court hearing.  See Re InvoCare Limited [2023] NSWSC 1180.

Takeovers Panel makes a declaration of unacceptable circumstances in relation to the affairs of Bullseye.  On Friday 6 October 2023, the Takeovers Panel made a declaration of unacceptable circumstances in relation to the affairs of Bullseye, which is the subject of an off-market takeover bid by Emerald Resources NL (ASX: EMR) (Emerald).  On 24 May 2023, Bullseye received a non-binding indicative offer from Emerald to acquire all of the shares in Bullseye.  The offer included terms and conditions relating to the settlement of oppression proceedings between Bullseye and two of its substantial shareholders and the provision of shareholder intention statements from those two substantial shareholders.  On 26 July 2023, the shareholder intention statements were executed, a bid implementation agreement between Bullseye and Emerald was executed, and settlement deeds with respect to the oppression proceedings were signed.  Emerald’s bid opened on 21 August 2023, and the two substantial shareholders accepted the bid on 28 August 2023.  The Panel inferred that the takeover bid, the shareholder intention statements and the settlement of the oppression proceedings were part of one commercial transaction.  The Panel also considered that, by entering into the shareholder intention statements and procuring the settlement of the oppression proceedings, Emerald acquired a relevant interest in the shares held by the two substantial shareholders and increased its voting power in Bullseye from approximately 57.23% to approximately 75.54%, in breach of section 606 of the Corporations Act 2001 (Cth).  Among other things, Bullseye will be required to prepare a supplementary target’s statement, and shareholders in Bullseye who have accepted the takeover bid will be provided with withdrawal rights.  See Takeovers Panel media release.


Industry questions effectiveness of subsidies for clean energy and critical minerals projects.  On 9 October 2023, Chief Executive Officer of the Australian Energy Market Operator (AEMO), Mr Daniel Westerman, delivered a speech at the Australian Financial Review Energy and Climate Summit 2023 in which he called for clean energy project developers to exploit all available government programs to expedite the development of their projects.  See AEMO media release.  Mr Westerman noted that the AEMO’s recent reliability outlook identified that the need for further investment into Australian national electricity market is “urgent and sustained”, and that it is important for industry and government to “keep the dialogue going and importantly, projects developing”.  However, industry has questioned the effectiveness of government subsidies for clean energy and critical minerals projects.  Chief Executive Officer of BHP, Mr Mike Henry, has indicated that government subsidies, if handled in the wrong way, could “reduce the drive for fundamental policy reform and create distortions in the market that actually harm long-run market efficiency”.  Mr Henry further suggested that governments reform project permitting processes as a means to encourage investment in critical minerals without providing subsidies.  We expect public debate regarding the efficacy of public funding of energy transition projects to intensify, as Governments around the world begin to adopt aggressive spending measures to speed the adoption of clean energy technologies.

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