LAW FIRM BACKS SCRAPPING OF 100-MEMBER RULE

LAW FIRM BACKS SCRAPPING OF 100-MEMBER RULE

THE FEDERAL Government’s proposal to repeal the 100-member rule will have a positive effect on shareholders, according to law firm Corrs Chambers Westgarth.

Changes to Section 249D of the Corporations Act 2001, will remove the rule allowing a small group of investors to call special general meetings for public companies.

“Removal of the 100-member rule will have a positive impact on shareholder participation and will go a long way to managing costs for Australian listed companies.

Lumsden says many industry groups have lobbied for its abolition since 1982, as it gives an “extraordinary amount of power” to a minority.

“Shareholder activism is a component of corporate governance. It does not mean that 100 shareholders, who may hold just a tiny fraction of the capital of the company, should be able to put the company to the cost of holding a meeting of their choosing,” he says.

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