Access to share registers and predatory share offers

David Tweed and his Direct Share Purchasing Corporation Pty Ltd have been involved in 2 decisions related to the practice of unsolicited direct offers to listed company shareholders to purchase shares below market price or over a long period or on other unfavourable terms.

In Tweed and Australian Securities and Investments Commission [2008] AATA 514 the Administrative Appeals Tribunal reviewed Mr Tweed's history leading up to ASIC's permanent banning of Mr Tweed from providing financial services. The AAT decided that the order would be of no effect in respect of Tweed's companies' activities and set it aside.

In Direct Share Purchasing Corporation Pty Ltd v AXA Asia Pacific Holdings Ltd [2008] FCA 935 the Federal Court  reviewed the fee Direct Share Purchasing Corporation was obliged to pay Axa for a copy of its member share register (which was managed by Computershare).

AXA charged a fee of $17,195.39 for providing a CD Rom containing a PDF copy of the member register (rather than an Excel file as Direct Share requested). The file format was not an issue.

"Section 173(3) provides the company must give a person a copy of the register (or a part of the register) if a person asks for a copy and "pays any fee (up to the prescribed amount) required by the company". The Corporations Regulations 2001 (Cth) (the Regulations) specify that in the case of a register kept on a computer the fee that can be charged is "a reasonable amount that does not exceed the marginal cost to the company of providing a copy": reg 1.1.01 and sch 4, item 3(b). In other words, the fee must satisfy two conditions: (1) it must be a reasonable amount; and (2) the amount must not exceed the marginal cost to the company of providing a copy of the register."

The Court decided that a reasonable fee was $250 and ordered Axa to refund the difference.