CODEWORD

The Panel depends on market participants providing the Panel with full and fair disclosure of all material information. This is necessary to allow the Panel to operate efficiently and effectively. In particular, such disclosure is critical to enable the Panel to make informed (and therefore better) decisions in limited timeframes.

The Panel has been concerned by recent instances of market participants not providing disclosure of all material information in their dealings with the Panel or only doing so after protracted correspondence.

The Panel would like to remind market participants of relevant obligations in the Takeovers Act 1993 (the Act), the Panel’s expectations, and the reasons for the Panel’s expectations.

Obligations under the Act

There are various offences under both the Takeovers Code and Takeovers Act for misleading and deceptive conduct. In particular, market participants (including advisers) should bear in mind section 44 of the Takeovers Act which provides (as is relevant):

44 General offences

(1) A person must not - 

(a) furnish information, produce a document, or give evidence to the Panel or a member, officer, or employee of the Panel knowing it to be false or misleading; or

(b) attempt to deceive or knowingly mislead the Panel or a member, officer, or employee of the Panel in relation to any matter before it.

...

(5) Every person who contravenes this section commits an offence and is liable on conviction to a fine not exceeding $300,000 and, if the offence is a continuing one, to a further fine not exceeding $10,000 for every day or part of a day during which the offence is committed. 

To be clear, conduct can be misleading or deceptive by omission (e.g., by failing to provide relevant information).

Accordingly, market participants should deal with the Panel in the same way they might deal with the Court. Market participants should seek to identify all material information and ensure that it is provided to the Panel promptly.

Further, market participants must provide all material information including information which does not support their position. Market participants must not:

• seek to withhold or otherwise obscure material information which is not supportive of their position;
• only provide the Panel with the information which has been requested if it should be apparent to them that there is other information which might be material; or
• otherwise be economical with the information they provide.

If market participants are unclear about whether information might be material, they are always able to discuss its materiality with the Panel executive.

Reasons for disclosure of all material information

In the first instance, disclosure of all material information is necessary for the efficient operation of the Panel, particularly where the Panel is required to act swiftly in respect of live transactions. The Panel will invariably have less familiarity with a transaction than the market participants. Also, it is not always clear to the Panel what additional information should be sought.

Further, the Panel considers that full and frank disclosure is in the interests of market participants. While decisions ultimately rest with the Panel, market participants can seek guidance from the Panel executive on a matter. The Panel executive will give such guidance on the basis of information provided to it.