ASX LISTING RULE AMENDMENTS – VOTING EXCLUSIONS
Corporate News - 23 November 2017
In addition to the ASX Listing Rule amendments related to reverse takeovers, amendments to voting exclusion statements and the definition of associates will apply to all voting exclusions under the Listing Rules, not just those related to security holder resolutions approving an issue of securities under or to fund a reverse takeover for the purposes of Listing Rule 7.1. These amendments will also commence on 1 December 2017.
Currently, the voting exclusion requirements in Listing Rule 14.11 apply whether an excluded person is voting for or against the relevant resolution. The amendments will mean that excluded persons are only precluded from voting in favour of a resolution (i.e. they will be entitled to vote against the resolution).
A consequence of these amendments is, in certain circumstances, where shareholder approval is sought under a combination of Listing Rules and provisions of the Corporations Act the voting exclusions will not be consistent. For example, where approval is sought under ASX Listing Rule 10.11 and Chapter 2E of the Corporations Act for issues of securities to related parties, the Listing Rules will only exclude votes from specified persons in favour, whereas the Corporations Act excludes voting on the resolution from specified persons whether for or against. Also, the Listing Rules permit the Chair to vote undirected proxies of a person entitled to vote on the resolution, whereas the Corporations Act only permits the Chair to vote directed proxies of persons entitled to vote on the resolution.
A further amendment relevant to voting exclusions is a change to the definition of “associates”. Currently, the definition of “associate” in Listing Rule 19.12 incorporates by reference the definition of that term in sections 12 and 16 of the Corporations Act. However, the Corporations Act addresses groups of bodies corporate that are controlled by a body corporate but fails to address groups of other types of entities and also groups that are controlled by an individual. The definition of “associate” in Listing Rule 19.12 will be amended to apply to groups of entities under common control regardless of whether the controller is an individual, a body corporate or some other type of entity.