Event and Time
Event Description
Ellerston Global Investments Ltd (EGI) applied to the court for orders to convene a meeting of its ordinary shareholders under section 411 of the Corporations Act 2001 (Cth) to consider a proposed scheme of arrangement with Ellerston Capital Limited (ECL), involving a significant restructuring and transfer of assets.
Application and Claims
- EGI sought approval to convene a scheme meeting for shareholders to vote on the proposed arrangement.
- The scheme involved ECL acquiring all issued share capital of EGI in exchange for units in an unlisted fund managed by ECL.
- Complexities included compliance with "know your customer" (KYC) regulations, especially concerning shareholders who had not yet provided KYC information.
Judicial Decisions
- The court ordered the convening of the scheme meeting, allowing shareholders to consider and vote on the proposed scheme of arrangement.
Dispute Points and Legal Basis
Dispute Points
- EGI's Arguments:
- The scheme is fair and in the best interests of shareholders. - Affidavits from experts including KPMG support the fairness of the scheme. - The inclusion of provisions for KYC compliance addresses potential performance risks for shareholders.
- ASIC's Concerns:
- Questions were raised about potential coercive impacts of the early termination fee and whether KYC requirements could disadvantage shareholders. - EGI's structure faced scrutiny due to the necessity of KYC compliance for the issuance of units.
- Shareholders' Concerns:
- Matters of fairness regarding the Early Termination Fee and how KYC compliance could affect their acquisition of units.