find the latest legal job
Corporate Counsel and Company Secretary
Category: Generalists - In House | Location: Newcastle, Maitland & Hunter NSW
· Highly-respected, innovative and entrepreneurial Not-for-Profit · Competency based Board
View details
Chief Counsel and Company Secretary
Category: Generalists - In House | Location: Newcastle, Maitland & Hunter NSW
· Dynamic, high growth organisation · ASX listed market leader
View details
In-house Projects Lawyer | Renewables / Solar | 2-5 Years PQE
Category: Generalists - In House | Location: All Australia
· Help design the future · NASDAQ Listed
View details
Insurance Lawyer (3-5 PAE)
Category: Insurance and Superannuation Law | Location: Brisbane CBD & Inner Suburbs Brisbane QLD
· Dynamic organisation ·
View details
Legal Counsel
Category: Corporate and Commercial Law | Location: North Sydney NSW 2060
· 18 month fixed term contract · 3-5 years PQE with TMT exposure
View details
Gwalia furor a sham: lawyers

Gwalia furor a sham: lawyers

Those who have applauded the federal Government's proposal to overturn the High Court's decision in the Sons of Gwalia case are those with same vested interests of those who lobbied for reform, a leading lawyer claims.

THOSE who have applauded the federal Government's proposal to overturn the High Court's decision in the Sons of Gwalia case are those with same vested interests of those who lobbied for reform, a leading lawyer claims. 


A Slater & Gordon commercial lawyer has today spoken publicly about the Government's proposal, saying it's a victory for powerful financial institutions at the expense of everyday shareholders.


The Slater & Gordon senior associate, Ben Phi, said the changes being proposed by the Federal Government undermine the current system.


Shareholders rely on a listed company’s compliance with its continuous disclosure obligations when making investment decisions, he said. "It is a regime that is vital to market confidence and which has helped establish Australia as the financial centre that it is."


“The government proposes to overturn a law that only applies in limited circumstances - namely, to protect shareholders who can prove that the company they invested in had misled them.


“When investing, shareholders assume many risks that trade creditors do not in exchange for the rights and benefits that accompany their ownership stake. But this should not include the risk of insolvency caused by a company's fraud or its failure to disclose price-sensitive information.”


Phi said the government’s proposed changes would not encourage lenders to adopt best practice.


“The High Court's decision ought to have encouraged financial institutions to tighten their lending criteria and assess the risk posed by weak corporate governance policies and structures. They could have joined the fight to encourage listed companies to adopt best practice in their market disclosure.


“Instead the government's proposed reform relieves this pressure, while also undermining the continuous disclosure regime that underpins investor confidence in the Australian equities market."


Phi said overturning the Sons of Gwalia decision would not mean a return to the status quo.


“The High Court merely clarified the law as it was, confirming that people with legal claims against a company in administration are able to prove as unsecured creditors in respect of the losses alleged to have been suffered.


“The decision exposed a false premise that had underpinned commercial lending, and exposed many lenders to risk that they had failed to account for. The government has chosen to protect banks at the expense of shareholders rights.”

Like this story? Read more:

QLS condemns actions of disgraced lawyer as ‘stain on the profession’

NSW proposes big justice reforms to target risk of reoffending

The legal budget breakdown 2017

Gwalia furor a sham: lawyers
lawyersweekly logo
Promoted content
Recommended by Spike Native Network
more from lawyers weekly
LCA president Fiona McLeod SC
Aug 17 2017
Where social fault lines meet the justice gap in Aus
After just returning from a tour of the Northern Territory, LCA president Fiona McLeod SC speaks wit...
Marriage equality flag
Aug 17 2017
ALHR backs High Court challenge to marriage equality postal vote
Australian Lawyers for Human Rights (ALHR) has voiced its support for a constitutional challenge to ...
Give advice
Aug 17 2017
A-G issues advice on judiciary’s public presence
Commonwealth Attorney-General George Brandis QC has offered his advice on the public presence of jud...
APPOINTMENTS
Allens managing partner Richard Spurio, image courtesy Allens' website
Jun 21 2017
Promo season at Allens
A group of lawyers at Allens have received promotions across its PNG and Australian offices. ...
May 11 2017
Partner exits for in-house role
A Victorian lawyer has left the partnership of a national firm to start a new gig with state governm...
Esteban Gomez
May 11 2017
National firm recruits ‘major asset’
A national law firm has announced it has appointed a new corporate partner who brings over 15 years'...
opinion
Nicole Rich
May 16 2017
Access to justice for young transgender Australians
Reform is looming for the process that young transgender Australians and their families must current...
Geoff Roberson
May 11 2017
The lighter side of the law: when law and comedy collide
On the face of it, there doesn’t seem to be much that is amusing about the law, writes Geoff Rober...
Help
May 10 2017
Advocate’s immunity – without fear or without favour but not both
On 29 March 2017, the High Court handed down its decision in David Kendirjian v Eugene Lepore & ...