Corporate governance update: substantial holder notices — some recent developments

Substantial holder notices are essential for the existence of an informed market. As reiterated by the Takeovers Panel in the recent Northern Iron Ltd [2014] ATP 11 decision, ‘the broadly cast requirements of section 671B(4)3 contribute to ensuring that the market is fully aware of the nature of, and details concerning, the substantial holder and their associates’ interest and the potential impact of the terms of any relevant agreement’.

As a consequence then, a material failure to comply with the substantial holder provisions may warrant enforcement action by the Australian Securities and Investments Commission (ASIC) and/or give rise to a declaration of unacceptable circumstances and orders by the Takeovers Panel.

In this corporate governance update, DLA Piper provides a brief overview of the substantial holder notice regime under chapter 6C of the Corporations Act (Cth) 2001; highlights areas of focus for ASIC; and highlights, by reference to the recent Takeovers Panel decision in Northern Iron, some potential consequences of material non-compliance…

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