The Australian Council of Superannuation Investors (ACSI) wants the Government to review corporate governance issues in dual-listed companies that weaken shareholder’s rights.
ACSI commissioned research into these structures by S E K Hulme QC and discovered dual-listed companies substantially entrench the position of directors and management. This undermines the ability of investors to change non-performing boards and management.
Since 1988, 11 dual-listed companies have been created, but six have already ceased. Notable dual-listed companies still remaining include Rio Tinto, BHP Billiton and Brambles.
The research found these structures have often been devised without any guidance or debate by Australia’s corporate legislators. They have also required many variations and exemptions from the Corporations Act, unlike companies that have come under the one jurisdiction.
ACSI president Michael O’Sullivan says the key elements of these companies run contrary to the Government’s own corporate law of economic reform of empowering shareholders.
“It is clear that legislators need to put in place appropriate rules to govern and control hybrid corporate ‘creatures’ of this kind,” he says.
“There is a clear need for a comprehensive policy review involving submissions from interested parties that would lead to key principles being incorporated into law or regulation, in order to restore reasonable powers to shareholders that have been taken away by existing dual-listed company structures.”
Areas covered by the research include the removal of directors and obstacles to takeovers which becomes difficult, as it needs two sets of shareholders to approve and two different jurisdictions.
“We are looking for a sensible and practical restoration through Australian corporate law and regulation of the rights of public investors in dual-listed companies to the rights enjoyed by public investors in ‘normal’ Australian single listed companies,” O’Sullivan says.
ACSI has sent copies of the research to the Federal Government and the Opposition, as well as the two regulators of listed companies — the Australian Securities and Investments Commission and the Australian Stock Exchange.
