The Senate last night passed without amendment the Corporations' Amendment (Repayment of Directors' Bonuses) Bill 2002.
The Bill amends the Corporations Act 2001 to permit liquidators to reclaim unreasonable payments made to the directors of insolvent companies.
The Parliamentary Secretary to the Treasurer, Senator Ian Campbell, said Labor and the Democrats dropped their opposition to the bill after accepting that the Government's CLERP 9 reforms to be introduced later in the year would include measures more extensive than their proposed amendments.
"CLERP 9 proposals incorporate a range of measures to enhance corporate disclosure, including remuneration, auditor and analyst independence and increased penalties for disclosure breaches," he said.
"In any event, we will not accept policy-on-the-run amendments to be tacked onto other bills on the floor of the Senate.
"Sound policy demands the rigors of extensive consultation - a course the Government has followed right through the corporate law economic reform program."
The bill applies to transactions that involve a director of the company or close associate, meaning a relative of the director or the spouse of a director. In both cases, de facto spouses are included.
To be caught, the transaction must have been unreasonable and entered into during the four years leading up to a company's liquidation, regardless of its solvency at the time of the transaction.
"The bill builds on the Government's previous work in relation to corporate solvency over recent years," Senator Campbell said.
"It gives a strong statutory expression of the Government's belief that directors should not receive unreasonable remuneration, particularly when the company is not financially viable, and assists in the restoration of funds, assets and other property for the benefit of employees and other creditors."
CANBERRA
28 March 2003
Contact: Wayne Grant 02 6277 3955 or 0407 845 280