Nick Xenophon (SA, Independent) Share this | Hansard source

I will make a very short contribution, if I may. I indicate that I do not support the Corporations Amendment (Sons of Gwalia) Bill 2010. I understand that the numbers are not here and that this is essentially non-controversial legislation, but I do have concerns about this. The Sons of Gwalia decision effectively protected investors who became shareholders, to put them on an equal footing with creditors. It is in the context of those who become shareholders who have subscribed pursuant to an offering. I see them, as did the High Court, as being involved in the company pursuant to that offering, pursuant to that subscription, effectively as investors in the company. If misrepresentations were made, I think they should be on equal terms with creditors. I know that the coalition and the government have taken the view that since the global financial crisis this could affect equity raising and could affect corporations—this has been raised as a concern—but I have real concerns about that. I think that the High Court got it right, and I think the parliament is getting it wrong by going down this path.

I understand from my officers’ discussions with the government that there will be an opportunity for the Senate Standing Committee on Economics to review this further—I am not sure if the parliamentary secretary can confirm that—but I just want to raise my concerns and my opposition to this bill. I think we are making a mistake. I think that the High Court took the right approach in protecting those who have invested in companies, and I worry that, under the cover of the global financial crisis, there are some entities who are getting away with an approach that I do not think is necessarily in the best interests of those who have put money in companies. Let us wait and see how this pans out, but I hope that a review of this may cause some reconsideration of this measure down the track.