Taking Corporate Governance Seriously during Fundraising: Exposure to Personal Liability for Cost Orders""

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dc.contributor.author Baxt, R. en_US
dc.date.accessioned 2009-11-12T04:43:55Z
dc.date.available 2009-11-12T04:43:55Z
dc.date.issued 2004 en_US
dc.identifier 2004001491 en_US
dc.identifier.citation Baxt, R. 2004 'Taking Corporate Governance Seriously during Fundraising: Exposure to Personal Liability for Cost Orders""', Company and Securities Law Journal, vol. 22, no. 5, pp. 336-340. en_US
dc.identifier.issn 0729-2775 en_US
dc.identifier.other C1 en_US
dc.identifier.uri http://hdl.handle.net/10453/3241
dc.description.abstract Two recent Federal Court decisions suggest that an honest and unintended failure to observe the procedural corporate fundraising requirements of the Corporations Act 2001 (Cth) may not mean that, ipso facto, the offer of securities is void. Re Insurance Australia Group Ltd (2003) 45 ACSR 702; [2003] FCA 581 and Re Wave Capital Ltd (2003) 47 ACSR 418; [2003] FCA 969 both involved companies that failed to comply with s 723(3)(a) of the Corporations Act. This provision requires that, if a disclosure document for an offer of securities states that the securities are to be quoted on a financial market, the company must make an applicatiun for such admission within a specified time limit. If such an application is not made, the consequences are that any issue or transfer of securities in response to an application made under the disclosure document is void. Additionally, persons offering the securities must return the money received from the applicants as soon as practicable. These outcomes raise interesting and practical questions. Can a breach of these provisions be cured through judicial discretion? Are the resultant additional costs and administrative inefficiencies caused by refunding moneys in such circumstances relevant considerations in granting relief? These questions fell for determination by the Federal Court in Re Insurance Australia Group Ltd and Re Wave Capital Ltd. Significantly, both cases affirmed that s 1322(4)(d) of the Corporations Act is available to authorise an extension of time for lodging an application for quotation of securities as required by s 723(3) and the related provisions of s 724(1)(b) of the Act. Although aspects of the decisions will be welcomed by company officers and solicitors who inadvertently fail to comply with statutory requirements in this area, there is also a cautionary sting in the tail. French's J unexpected order in Re Wave Capital Ltd prohibiting the company's costs of bringing the application being met out of company funds sends a strong and expensive message to company officers who fail to implement a proper system of checks and balances for compliance obligations during corporate fundraising. This note examines both decisions and discusses the implications for company directors' and secretaries. en_US
dc.publisher Law Book Company en_US
dc.relation.isbasedon en_US
dc.title Taking Corporate Governance Seriously during Fundraising: Exposure to Personal Liability for Cost Orders"" en_US
dc.parent Company and Securities Law Journal en_US
dc.journal.volume 22 en_US
dc.journal.number 5 en_US
dc.publocation Sydney en_US
dc.identifier.startpage 336 en_US
dc.identifier.endpage 340 en_US
dc.cauo.name School of Law en_US

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