THE FEDERAL Government aims to restore confidence in the Takeovers Panel by strengthening its powers under legislation.
Parliamentary Secretary to the Treasurer, Chris Pearce introduced the Corporations Amendment (Takeovers) Bill 2007 in response to the 2005 and 2006 Federal Court cases in which Glencore International challenged the powers of the Takeovers Panel.
Following an application made by Glencore for judicial review of a Panel decision, the Federal Court struck down the Panel’s decision on jurisdictional grounds, casting doubt over the Panel’s ability to effectively perform the role intended for it by parliament.
Pearce said this Bill will lay those concerns to rest.
“This Bill ensures the Takeovers Panel remains the principle place to manage takeovers in Australia. It’s been so successful because they’ve done a damn good job in a quick decisive manner but this decision risked taking some things out of the Panel and before the Court,” he said.
“We looked at the decision of the Court and thought that it presented a particular problem that needed to be clarified beyond doubt and fixed by way of legislation.”
The Bill specifies that a “substantial interest” in a company will not be confined to a narrow set of interests, as well as giving the Panel jurisdiction to intervene where it feels the circumstances are unacceptable under the Corporations Act.
It also says the Panel can take action where harmful consequences are likely to result without having to wait for them to occur.
Freehills partner in corporate M&A, Rebecca Maslen-Stannage, believes the Bill is an important move in restoring the Panel’s role.
“There’s a high degree of faith in the Takeovers Panel itself but the Glencore litigation took Australia a little bit back to the old world where instead of peer review we went back to court and that’s what we wanted to get away from in the first place,” she said.
“The result was that there wasn’t a lack of confidence in the Takeovers Panel’s ability to settle disputes but whether it would be able to have the last say in disputes.”
The Panel has been the central vehicle for settling takeover disputes since it took on its present form in 2000 under the CLERP reforms. The aim of the Panel is to reduce tactical litigation and provide fast, informal decisions in takeover disputes. The Panel is made up of experienced members of the legal and business communities.
“I’ve been on a number of matters before the Panel recently and I’ve also had experience in the hostile side of takeovers in the courts,” said Maslen-Stannage.
“This is a real positive improvement as things are resolved quickly and in a commercial manner and the fact you’ve got takeovers practitioners involved in the process means it gets a lot of buy-in from people involved in the process.”
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