Ms Anna Burke (Chisholm, Australian Labor Party) Share this | Link to this | Hansard source

On behalf of the Parliamentary Joint Committee on Corporations and Financial Services, I present the committee report entitled Corporation Amendments Takeover Bill 2006 exposure draft, together with the evidence received by the committee.

Ordered that the report be made a parliamentary paper.

by leave—The report looked into the subject matter and the exposure draft. It was a short, sharp and sweet look into this issue as there was a necessity for the Takeovers Panel to have a decision made fairly quickly. I would like to thank the secretariat for the speed with which this was all arranged.

The bill proposes amendments to chapter 6 of the Corporations Act 2001, which regulates corporate takeovers and the powers of the Takeovers Panel. According to the explanatory statement, the bill is designed to allow the panel to continue to act in an informal, efficient, effective and expeditious manner; to act as the primary forum for dissolving disputes during takeover bid periods; and to rely on the special expertise of its members. In particular, the bill proposes to amend the definition of ‘substantial interest’; allow the panel to take account of likely future effects of circumstances; before the panel makes an order, limit those able to make submissions to each person to whom a proposed order is directed; and set a time limit for the panel to review the decision of an earlier panel.

The bill was prompted by the Federal Court’s Glencore decisions, which interpreted the limits of the jurisdiction of the panel as set out in current legislation. Concerns were raised with the government that, as a result of Glencore, the panel’s powers and jurisdiction could be viewed in a way that is too narrowly formulated to enable the panel to perform effectively the role envisaged for it by parliament. The panel has been working successfully, and we did not want to see its powers limited.

The panel is the main forum for resolving disputes about a takeover bid until the bid period has ended. The panel is a peer review body, with part-time members appointed from the active members of Australia’s takeovers and business communities. The president of the panel, Mr Simon McKeon, described to the committee the operations and compositions of the panel:

... in the seven years that we have been operating, our focus has been on providing a dispute resolution regime that is informal, expeditious and, most importantly, has the support of the market that we operate in. It is a peer review model. There are approximately 46 members of the Takeovers Panel, drawn from a wide variety of professions and businesses in this country and each appointed for the contribution that they can make to resolving takeover disputes in this country.

The committee resolved that the bill should be adopted if the two recommendations in the report were adopted. The first recommendation is:

The committee recommends that the Government introduce an amendment to new paragraph 657A(2)(b) to replace the phrase ‘having regard to’ with ‘because they are inconsistent with or contrary to’.

The second recommendation is:

... that once the bill is passed by the Parliament the Government commence a consultation process with a view to amending Chapter 6C of the Corporations Act 2001 to establish a robust framework for the disclosure of equity derivatives relating to corporate takeovers.

In this world of new financing, there are many ways that takeovers can be formulated. There are many ways that financing can be raised, and we need to ensure that the parliament is on top of these before they happen and not after the event. I recommend the report to the House.