This is a service specifically targeted at the needs of busy non-executive directors (NEDs). We aim to give you a ‘heads-up’ on the things that matter for NEDs in the week ahead – all in just a few minutes.
In this edition, we discuss proceedings against two directors charged with offences relating to dishonest conduct, and the Full Federal Court of Australia’s determination that the production of documents pursuant to a voluntary disclosure agreement with the Australian Securities and Investments Commission (ASIC) does not automatically waive legal professional privilege. We also consider the Takeovers Panel’s reasons for declining to conduct proceedings in relation to the affairs of Global Lithium Resources Limited (ASX: GL1) (GL1).
In Over the Horizon, we discuss the uncertainty surrounding the nature and domestic impact of tariffs threatened by US President Donald Trump’s administration and potential flow on effects to Australian markets.
Legal
Director charged with dishonestly obtaining a financial advantage by deception in alleged false invoice scheme
On 4 February 2025, ASIC announced that, following an investigation by the regulator, Mr Mark Barnes was charged with two counts of dishonestly obtaining and one count of attempting to dishonestly obtain, a financial advantage by deception. It is alleged that, between May 2018 and December 2019, Mr Barnes used false invoices for services which were not rendered to obtain over $2.4 million in funding from a lender providing advance payments on the face value of purchased invoices. While Mr Barnes generally repaid the amounts advanced around the date required for repayments, he continued to submit false invoices on a rolling basis. It is further alleged that Mr Barnes attempted to obtain an additional $118,206 through a further false invoice submitted in January 2020. The matter has been adjourned to 4 March 2025 for further mention.
Director charged with dishonestly using her position to gain personal advantage
On 7 February 2025, ASIC announced that, following an investigation by the regulator, Ms Vickie Anne Vella was charged with two offences of using her position as director dishonestly with the intention of gaining an advantage for herself or causing detriment to the companies. It is alleged that, between August 2016 and April 2018, Ms Vella transferred approximately $1,565,298 in company funds to accounts for her personal use whilst one of the companies of which she was a director owed creditors almost $797,050. Both companies subsequently went into liquidation, owing $797,050 and $1,170,989 to creditors respectively. The matter has been adjourned to 11 April 2025 for further mention.
Full Federal Court upholds ASIC appeal in relation to voluntary disclosure regime
On 7 February 2025, ASIC announced that the Full Federal Court upheld its appeal in its case against the former managing director and CEO of Noumi Limited (Noumi), Mr Rory Macleod. As discussed in a previous edition of Boardroom Brief, on 24 February 2023, ASIC commenced proceedings against Noumi, its former Chief Financial Officer and Mr Macleod for alleged continuous disclosure failures, breaches of director and officer duties and false or misleading conduct. Noumi filed an interlocutory application on 13 September 2023 seeking a declaration that legal professional privilege attaches to certain documents, and resisted producing them to Mr Macleod. Justice Sharrif held that legal professional privilege did exist over those documents, but was implicitly waived by Noumi when it provided the documents to ASIC under a voluntary disclosure agreement. On appeal, the Full Federal Court determined that the production of documents to ASIC pursuant to a voluntary disclosure agreement does not necessarily waive a valid legal professional privilege claim. As noted by ASIC Deputy Chair Ms Sarah Court, this decision provides increased certainty for parties seeking to enter into voluntary disclosure agreements with ASIC, and maintains the efficacy of these agreements as an important investigative tool.
Takeovers Panel publishes reasons for its decision not to conduct proceedings in relation to the affairs of Global Lithium Resources Ltd
On 6 February 2025, the Panel published the reasons for its decision not to conduct proceedings in relation to the affairs of GL1. As discussed in a previous edition of Boardroom Brief, the Panel declined to conduct proceedings following an application from GL1 in relation to undisclosed associations ahead of an annual general meeting where board composition resolutions were on the agenda. The Panel held, among other things, that: (1) the application was not timely given the significant amount of time since relevant events occurred; and (2) there was no reasonable prospect that it would extend time for the application to be made. Given the finding that there was no reasonable prospect that the Panel would make a declaration of unacceptable circumstances, the Panel did not make final orders. GL1 has filed an application seeking a review of the Panel’s decision to not conduct proceedings on 29 January 2025. The Panel has yet to decide whether to conduct proceedings in relation to the review application.
Over the horizon
The tariff trade war – an expensive food fight leaving no country clean?
On 1 February 2025, the Trump administration announced the imposition of tariffs of between 10 and 25% across Canada, China and Mexico – the US’ top three global trading partners according to US Government census data. The Trump administration’s official view is that these tariffs are necessary to ‘protect’ the US from the ‘extraordinary threat posed by illegal aliens and drugs’. Just as swiftly, President Trump has temporarily paused the imposition of the tariffs concerning Mexico and Canada – although one wonders how effective the threat of tariffs as a negotiating tool in the US’ arsenal will be, given China responded just days later with its own trade measures, including tariffs on LNG, coal and crude oil from the US. The Australian market quickly felt the sting of this first wave of tariffs, with the ASX 200 index falling 1.8 per cent on Monday 3 February, wiping approximately $50 billion off the market. More materially for Australia, if US tariffs further slow China’s economy, this is expected to reduce China’s demand for Australian exports, hurting both Australian’s mining industry and the Australian dollar and in turn contributing to domestic inflation. The raft of tariffs shows no signs of stopping, with President Trump having signed an executive order on Monday, 10 February 2025 to introduce a 25 per cent tariff on steel and aluminium on ‘all countries’, with ‘no exceptions’ – a threat to Australia’s steel and aluminium market that has materialised for Australia notwithstanding Prime Minister Anthony Albanese's urgent discussion with the President, in a bid to plead for Australia’s continued exemption from such tariffs.