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Takeovers Panel rejects ‘exaggeration’

Takeovers Panel rejects ‘exaggeration’

AUSTRALIA’S corporate Takeovers Panel has rejected claims by The Australian newspaper that the Government has ordered an independent review into its constitutionality because the decision in…

AUSTRALIA’S corporate Takeovers Panel has rejected claims by The Australian newspaper that the Government has ordered an independent review into its constitutionality because the decision in Glencore v Takeovers Panel, the first court challenge to the body, “led to a damning assessment of the use of its authority”.

In a letter to the newspaper entitled ‘Exaggeration regarding review of Takeovers Panel’, president Simon McKeon and director Nigel Morris said that Michael McKenna’s article of last Friday, ‘Takeovers Panel faces review’, “suggests that the Government has ordered an examination of the Panel’s constitutional and legal position, because the decision in Glencore v Takeovers Panel exposed defects in the Panel’s legal underpinnings”. But, the letter claims, “nothing could be further from the truth”.

The article states that the Takeovers Panel is now facing sweeping reforms following the landmark Federal Court ruling that it had exceeded its powers.

But the Panel states in the letter, obtained by Lawyers Weekly, that it initiated a review of its own procedures, while consulting the business and legal communities, “in order to see how we can work better within the existing legal framework”. McKeon and Morris write: “This was planned long before the Glencore decision and independently of it. Initially the Panel had planned to complete the review before the transactions to which the Glencore decision related.”

The Takeovers Panel neither requires nor intends “sweeping reforms” to the legislation under which it works, argues the letter. While it accepted that it is possible proposals to change its legal framework may emerge from the review, it said in the letter that this is not the primary purpose. “In particular, there will be no review of the Panel’s position under the constitution, which was specifically confirmed by [Justice] Emmett in the Glencore decision,” the letter states.

“Nor do we propose legislative amendments in order to prevent a repeat of that decision. While we have proposed some minor amendments to the Government, they have nothing to do with the Glencore matter or any of the issues it raised, and they were already proposed long before that matter came up,” it states.

The Australian article states that the review, to be finalised by March this year, will look at “toughening the selection process of the 47-strong panel in the face of ‘frequent’ conflict of interest issues with its members”.

But in their letter, the president and director of the Takeovers Panel state: “The issues in the review concerning conflicts of interest are not aimed at ‘toughening’ the selection of sitting Panels. Rather, they are intended to ask whether the Panel is currently too strict in deciding which members should not sit in particular proceedings.”

The director of the Panel, Morris, said in the article last week that he would not pre-empt the review’s findings, but “that it was possible the scope, role and procedures of the watchdog may have to be overhauled”.

“If Australia is going to have a takeovers panel, it may as well be a good one,” he told The Australian. “And this inquiry is one way of ensuring that.” In the article, he said that a wide-ranging assessment of the panel has been intended for some time, but that the Glencore decision made it an “appropriate time”.

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