Brisbane Airport Link still has life says UWS law expert

Date: 15/04/2009

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

Professor Michael Adams, the Head of the School of Law at UWS, says the $4.8 billion dollar Brisbane Airport Link project still has life as the Extraordinary General Meeting (EGM) resolutions were not passed.

"Nick Bolton, the major shareholder of BrisConnections, sold his voting rights for $4.5 million to the toll road builder, Thiess John Holland. The deal that has taken place between the two companies is, in fact, a legal transaction and is subject to the scrutiny of the Australian legal system," says Professor Adams.

"The exchange between the two companies can also be interpreted as 'greenmailing', which is a well-known American corporate phrase that describes the process of money being paid by a company, or allied company such as Thiess-John Holland, to acquire its own shares of stock from a shareholder who is threatening to take control of a company."

"Mr Bolton will be required to pay tax on the $4.5 million payment through his company, Australian Style Investments. Also, there is discussion of an ensuing class action to further prevent Mr Bolton from profiting fully from the transaction with Thiess John Holland."

Despite the recent twists and turns in the BrisConnections case, the underlying law surrounding the case has been upheld. Section 140 of the Corporations Act 2001, which has been around since 1855, states there is a legal contract between the shareholder - known as a member - and the company. The terms of the contract are the old articles of association, now called the corporate constitution, and this outlines the payments on calls to shares.

On April 15, Queensland Supreme Court judge Peter Dutney made it clear that regardless of the winding up of the scheme or the trusts, payment of the second instalment or final instalment will not be lost or defeated for any reason.

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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