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 guidance on the merger reform transition released by the Australian Competition and Consumer Commission (ACCC), the reasons for the Takeovers Panel’s decision not to conduct proceedings in relation to the affairs of Keybridge Capital Limited (ASX: KBC) (KBC) and Benjamin Hornigold Ltd (ASX: BHD) (BHD) and a six-and-a-half year ban imposed on a former director of Kingdom Developments Australia Pty Ltd and associated entities (together, Kingdom Developments).
In Over the Horizon, we discuss the proposals by the Australian Prudential Regulation Authority (APRA) in relation to updating governance standards for banks, insurers and superannuation trustees.
Regulatory
ACCC releases guidance on merger reform transition
On 4 March 2025, the ACCC released guidance for transitioning to the new merger control regime, noting that businesses considering seeking an informal merger review after 1 July 2025 should engage with the ACCC as soon as possible to ensure the regulator can complete its assessment before the new mandatory merger review process comes into effect. The key transition periods are:
Before 1 July 2025: The current system of voluntary applications for informal clearance or merger authorisation applies. However, parties should note that if a deal is informally cleared before 1 July 2025 but not completed by 1 January 2026, it will require an updated informal clearance in the second half of 2025 to be exempt when the new regime commences on 1 January 2026. Additionally, deals that receive a merger authorisation or informal clearance in the second half of 2025 will need to be completed within 12 months of that authorisation or clearance to be exempt from the mandatory notification regime.
Between 1 July 2025 and 31 December 2025: Parties may still apply for informal clearance, but merger authorisation applications will no longer be accepted. Informal clearance applications received after October 2025 are unlikely to be finalised in time before 1 January 2026, in which case they will also need to be notified under the new regime if they meet the notification thresholds. Parties may voluntarily use the new authorisation regime to avoid the risk of having to file under both regimes.
1 January 2026 onwards: The new mandatory and suspensory notification regime commences. While the proposed notification thresholds do not yet have legislative force, the guidance states that parties unsure about whether an acquisition will meet the final thresholds may either apply for a notification waiver or choose to notify of the acquisition in any event. The ACCC will no longer grant informal clearance and parties will need to wait for approval from the ACCC before completing a notifiable transaction.
Refer to our recent G+T Insight for further analysis on the merger reform transition and the ACCC’s guidance.
Legal
Takeovers Panel publishes reasons for its decision not to conduct proceedings in relation to the affairs of Keybridge Capital Limited and the affairs of Benjamin Hornigold Ltd
On 4 March 2024, the Panel published the reasons for its decision not to conduct proceedings in relation to the affairs of KBC. As discussed in a previous Boardroom Brief, the Panel received applications from KBC in relation to its own affairs and the affairs of BHD (of which KBC holds a 19.59% interest) following a requisitioned meeting of KBC shareholders called by WAM Active Limited and its associates (collectively, WAM), who hold voting power of approximately 44% in KBC. The Panel held, among other things, that: (1) KBC had not provided sufficient evidence to establish the alleged association between WAM and certain proposed new directors of KBC; (2) KBC failed to provide any evidence to demonstrate the existence of any agreement as to voting in either KBC or BHD between WAM and its alleged associates; and (3) in light of similar matters currently before the Supreme Court of New South Wales forming part of a broader dispute between WAM and KBC, it was unlikely to be in the public interest for the Panel to make a declaration of unacceptable circumstances.
Former director of real estate development business banned from involvement in financial services
On 6 March 2025, ASIC announced that it had banned former Kingdom Developments director, Mr Andrew Bodnar, from providing financial services, controlling an entity that carries on a financial services business and performing any function involved in the carrying on of a financial services business for six and a half years. In around 2023, Mr Bodnar filed for bankruptcy and the Kingdom Developments group of companies engaged in property development projects in five states collapsed, owing creditors circa $131 million. Following an investigation into the collapse, ASIC found the arrangements between investors and entities in the Kingdom Developments group involved the issue of financial products and were required to be operated by an entity that either held an Australian financial services licence or was authorised by a licensee to provide financial services. ASIC Executive Director of Enforcement, Mr Chris Savundra, noted that Mr Bodnar’s conduct showed a disregard for the laws designed to protect investors and took the opportunity to remind the market that “it is incumbent on anyone accepting investor money to ensure they are operating legally and understand their obligations to the investor”.
Over the horizon
APRA proposes a governance shake-up for directors of banks, insurers and super funds
On 6 March 2025, APRA released a discussion paper setting out eight proposals to strengthen its prudential governance framework for banks, insurers and superannuation trustees. APRA Chair, Mr Johns Lonsdale, noted that while effective governance “is fundamental to financial stability and sound risk management”, it is equally clear that some entities are “treating compliance with some requirements as a box-ticking exercise”. In a bid to target these deficiencies, APRA’s proposed changes include: (1) increased requirements for boards to ensure they have the right mix of skills and experience to deliver the entity’s strategy; (2) raising minimum standards around the fitness and propriety of responsible persons; (3) strengthening board independence, especially in relation to entities that are part of a group; and (4) clarifying APRA’s expectations around the roles of boards, the chair and senior management. While APRA said these proposals are not expected to add an undue cost burden and will involve only minor change for entities with mature governance practices, it is unclear whether that will be the case in practice. Certain proposals are likely to be controversial, including the proposed introduction of a lifetime tenure limit of 10 years for non-executive directors and a proposed requirement for significant financial institutions to engage with APRA on succession planning and potential appointments. The proposals are outlined in full in the discussion paper and APRA is seeking written submissions in response by 6 June 2025 with any updated governance standards proposed to commence by 2028.