International Law

ASIC v Hassle Free: injunction to prevent unsolicited share offers

By David Jacobson

In ASIC v Hassle Free Share Sales Pty Ltd (Hassle Free) , ASIC obtained consent orders for injunctions preventing the company from making unsolicited offers to shareholders in health insurer, nib Holdings (NIB), for the next five years.

According to ASIC, in December 2010 Hassle Free used NIB?s share register to make 25,000 unsolicited share offers to NIB shareholders offering to purchase their shares for $0.52 per share. The offer was almost 60 per cent below the then prevailing market share price of $1.27.

The application was made under s.177(1AA) of the Corporations Act 2001 . Section 177(1AA) prevents someone who has obtained information from a company share register from using it for prescribed prohibited purposes .

Regulation 2C.1.03 of the Corporations Amendment Regulations 2010 (No. 10) prescribes the improper purposes for getting a copy of a company member register pursuant to section 173 (3A) (b) of the Corporations Act.

The following purposes are prescribed:
(a) soliciting a donation from a member of a company;
(b) soliciting a member of a company by a person who is authorised to assume or use the word stockbroker or sharebroker in accordance with section 923B of the Act;
(c) gathering information about the personal wealth of a member of a company;
(d) making an offer or invitation to which Division 5A of Part 7.9 of the Act applies.

Division 5A of Part 7.9 of the Act applies to unsolicited offers to purchase financial products off-market.

Full post as published by Australian Regulatory Compliance Review on February 16, 2011 (boomark / email).