OZschwitz slave pen: Outrageous smoke-style warnings for stocks 'predators'

Sharemarket predators like David Tweed may have to place warnings - similar to health warnings on cigarette packets - on low-ball offers to buy shares from investors under reforms being considered by the Federal Government.

Corporate Law minister Nick Sherry today flagged a range of reform options for cracking down on Mr Tweed and his ilk, who mail out unsolicited, underpriced offers to buy the shares of small investors, some of whom may not know their shares' true value.

Mr Tweed has targeted shareholders in a range of companies, including Commonwealth Bank, NIB, Rio Tinto, Wesfarmers and ANZ. Companies had attempted to block him and his rivals by charging large amounts for access to their shareholder registers, which contain the names and addresses of every shareholder.

But that method was scuppered by a Federal Court ruling earlier this year that Mr Tweed should have paid just $250 for a copy of AXA's register, not the $17,195 originally charged. Under the Corporations Act, companies must provide copies of registers for a "reasonable" fee.

Options being considered by the Government include putting in place a "proper purpose test" for access to a register; introducing a "cooling off" period for shareholders who accept the offers, placing warning statements in offer documents similar to, in the Government's words, the health warnings on cigarettes, and a do-not-contact register for shareholders.

"The reform options I am releasing today reflect serious concerns by the Rudd Government and the community about unsolicited share offers - and I know this is a view shared by many industry groups, listed companies and consumer advocates," Senator Sherry said.

But he added that access to share registers for "legitimate purposes" must be maintained. The Australian Shareholders Association has previously raised concerns about moves to restrict access to registers, saying it may impede shareholder activism - such as when the ASA seeks registers to notify shareholders of class actions against companies or to mount campaigns against underperforming directors and companies.

But Chartered Secretaries Australia is a major proponent of the "proper purpose test", for privacy concerns and to tackle the activities of sharemarket predators.

LNK

OZschwitz slave pen: Outrageous smoke-style warnings for stocks 'predators'

OZschwitz slave pen: Outrageous smoke-style warnings for stocks 'predators'

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