UWS law expert available to comment on BrisConnections case

Date: 09/04/2009

An expert in corporate law and governance from the University of Western Sydney is available for media comment as the BrisConnections case unfolds.

Professor Michael Adams, the Head of the School of Law at UWS, says the factual circumstances surrounding the BrisConnections case are complex, but the underlying law is very traditional and well established.

"A section of the Corporations Act, which has been around since 1855, defines the responsibilities between the shareholder and the company. The terms of the contract outline the payments on calls to shares and will ensure all contractual obligations are met," says Professor Adams.

"However, there are additional complexities as the BrisConnections case is occurring in the Federal Courts in Victoria and Queensland at the same time. The judges appear to be questioning the accuracy and the quality of the evidence being provided to the courts."

The Australian Securities and Investment Commission (ASIC) have become involved due to concerns that misleading information being provided by BrisConnections to investors will sway shareholders in favour of the company before the vital shareholder meeting next week.

If BrisConnections is wound up, each shareholder would still be required to pay the two dollars per share owed. The funds would be used by BrisConnections to pay their creditors.

"The ASX has already changed its rules to brokers, warning them in regards to the dangers of investing in partly paid shares. This has avoided some of the related issues, but it is up to the company's Board to communicate clearly on the main points," says Professor Adams.

"Many other companies that have partially paid-up shares traded on the ASX will be watching this litigation closely. So will the Queensland Government, who will hope to avoid the possibility of a huge whole in the ground, causing disruption from Brisbane city to the airport."

Professor Adams has conducted research for 20 years into corporate law in Australia, Europe, North America and Asia; and has completed a three-year Australian Research Council (ARC) funded project on the corporate governance of boards of directors in Australia, in conjunction with the law firm Dibbs Abbott Stillman, and the Centre for Corporate Governance at the University of Technology, Sydney.



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Kristy Gleeson
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