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 brought by the Australian Securities and Investments Commission (ASIC) against Wiluna Mining Corporation Limited (WMC) for breaches of continuous disclosure obligations, a Federal Court of Australia decision highlighting that documents provided in a data room are not necessarily “disclosed” for the purposes of information warranties and the Federal Court of Australia’s finding that Clorox Australia Pty Ltd (Clorox) contravened the Australian Consumer Law in connection with misleading “ocean plastic” claims in relation to its products.
Over the Horizon unpacks the latest results from the Australian Institute of Company Directors' (AICD) Director Sentiment Index Survey for the first half of 2025.
Regulatory
ASIC commences proceedings against Wiluna Mining Corporation Limited for continuous disclosure breaches
On 14 April 2025, ASIC announced it had commenced civil penalty proceedings against WMC for breaches of its continuous disclosure obligations. ASIC alleges that WMC misled the market by announcing on 17 June 2022 that it had “raised” $57.3 million as part of a capital raising, when $7 million of those funds were never received. The regulator further alleges that Mr Milan Jerkovic, the former chair of WMC, breached his director’s duties by failing to exercise due care and diligence and failing to take steps to cause WMC to qualify, withdraw or correct this announcement. It also alleges that Mr James Malone, former chief commercial officer of WMC, failed to take reasonable steps to ensure that the announcement did not omit information which rendered it misleading in a material respect. ASIC is seeking declarations of contravention against WMC and declarations of contravention and pecuniary penalties against Mr Jerkovic and Mr Malone. The case demonstrates the importance of carefully reviewing announcements regarding the outcome of capital raising initiatives, an area of focus of enforcement action in recent years.
Legal
Federal Court decision highlights that data room documents are not necessarily “disclosed” for the purposes of information warranties
On 4 April 2025, the Federal Court of Australia determined that Self Directed Super Funds Pty Ltd (SDSF), which had agreed to sell a financial planning business to Bridging Capital Holdings Pty Ltd (BCH), had breached a warranty in the sale documentation. It had “disclosed to [BCH] all information known to [it] about the Business, the Company and the Company Sale Shares and which would be material to a reasonable Buyer”. BCH commenced proceedings on the basis that (among other things) Mr Harris, the sole director and shareholder of SDSF, represented that the recurring revenue of the business would be no less than its current actual revenue, in breach of this warranty. Justice Stewart considered that it was not realistic for all data room materials to qualify this warranty in the context of a share sale transaction with a heavily populated data room and where there were pre-existing representations made to the buyer. His Honour further noted that BCH was not put on notice about matters concerning the recurring and future revenue of the business when, due to their materiality and in light of ongoing discussions between the parties, they would have had a reasonable expectation of being put on notice. This decision highlights that information in a data room won’t necessarily be considered “disclosed” for the purposes of information warranties and emphasises the importance of carefully drafting warranty exclusions and limitations in sale and purchase agreements.
Federal Court of Australia orders Clorox Australia Pty Ltd to pay $8.25 million in damages for misleading “ocean plastic” claims in relation to its products
On 14 April 2025, the Federal Court of Australia ordered Clorox pay $8.25 million in damages for misrepresenting that certain GLAD kitchen and garbage bags were made with “50% Ocean Plastic” or “50% Ocean Bound Plastic”, in contravention of the Australian Consumer Law (ACL). The Federal Court also ordered Clorox to set up an ACL compliance program, publish a corrective notice on its website and pay part of the Australian Competition and Consumer Commission’s (ACCC) legal costs. Justice Neskovcin held that the packaging on the relevant products suggested that the products were made from plastic waste collected from the ocean, when they were actually made from (among other things) plastic waste sourced from communities in Indonesia without formal waste management systems. These communities were located up to 50 kilometres from a shoreline. ACCC Chair Gina Cass-Gottlieb noted “[w]hile the ACCC encourages businesses to innovate and offer environmentally sustainable products, businesses need to be clear and accurate when making representations about them”. The case serves as a useful reminder that the ACCC “take[s] allegations of greenwashing extremely seriously and will continue to monitor claims made by businesses and, where appropriate … take enforcement action on misleading environmental claims”. See media release.
Over the Horizon
Director Sentiment Index Survey results – rising confidence clashing with compliance concerns?
On 9 April 2025, the Australian Institute of Company Directors (AICD) published the results of its Director Sentiment Index (DSI) Survey for the first half of 2025. Based on responses from 1,127 company directors, the DSI Survey indicates director sentiment has improved by 9.7 points from a post-pandemic low in the second half of 2024, marking the strongest improvement since 2021. Notably, only 25% of directors feel that a recession is likely within the next 12 months, a significant reduction from the previous 46% from the second half of 2024. However, overall director sentiment remains negative for the sixth consecutive survey at -23.9 points. According to the DSI Survey, domestic economic conditions remain the “number one issue keeping directors awake at night”, with nine in ten directors perceiving global uncertainty, heightened by the Trump administration’s economic policies, as the primary economic challenge for Australian businesses. Directors perceive legal and regulatory compliance as the second most important issue affecting the risk appetite of boards, with regulatory compliance expected to increase over the next 12 months. The survey found that boards’ commitment to achieving diversity remains strong despite challenges under the Trump administration, with 80% of the directors surveyed believing the push to diversity will remain the same or become stronger in the coming year. The survey results underscore the ongoing challenges and evolving priorities for boards. For more information, see the AICD news release.