ACSI submission to the ASX consultation on shareholder approval requirements under the ASX Listing Rules.
Summary position
Ensuring shareholders have a vote in material corporate actions is fundamental to fair, transparent and trusted markets. That trust has been undermined by companies that have used the ASX Listing Rules to allow dilutive acquisitions or mergers to occur without a shareholder vote. James Hardie’s acquisition of Azek highlighted how operation of the Listing Rules can lead to transactions that materially erode shareholder value.
ACSI welcomes the release of ASX’s consultation on potential changes to listing rules governing shareholder approval requirements and admission status. The consultation paper appropriately recognises investor concerns and implementation of the three key proposed amendments would meaning fully address the shareholder rights issues identified.
More specifically, ACSI supports the introduction of shareholder approval requirements for a change of admission category to ASX Foreign Exempt Listing (section 3) and for the voluntary delisting of a dual listed entity (section 4). We also strongly support amending the Listing Rules to provide bidder shareholders with enhanced rights to approve of share issues supporting takeovers and mergers (section 5).
Following consultation, we encourage ASX to progress timely implementation of these targeted proposals. As a general principle, ACSI supports the certainty provided by amending the Listing Rules rather than changing guidance or enforcement practices.
We also agree with ASX’s proposal not to amend Listing Rule 11.1 at this time. However, the operation of Listing Rule 11, as well as several other Listing Rules, warrants further consideration in the future. We encourage ASX to consider introducing a process for the periodic review of the Listing Rules.
Please see attached detailed responses to the consultation questions.
