Senator Nick Sherry, Minister for Superannuation and Corporate Law, has today introduced into the Parliament the Corporations Amendment (No 1) Bill 2008 which will ensure that individuals who are disqualified from managing companies in foreign countries will also be automatically disqualified in Australia.
The legislation will in the first instance operate only in relation to banned company directors from New Zealand, although other jurisdictions may be added in the future.
"The Government is keen to reinforce and enhance the integrity of Australia's companies and our financial markets."
"There is a gap in the existing law where individuals can avoid disqualification by moving to Australia. This is totally unacceptable, so we'll be closing that gap."
"I plan to discuss this new disqualification regime with other jurisdictions in 2009 so we can ensure banned directors from other countries can't operate here too," said Minister Sherry.
The Bill will ensure that persons disqualified by a court in their home jurisdiction from managing companies will be automatically disqualified in Australia.
In addition, where disqualification of a director has occurred by automatic operation of the law in a persons' home jurisdiction, as opposed to by a court, there will now be legal grounds for the Australian Securities and Investment Commission (ASIC) to apply to an Australian court for an order that that person also be disqualified in Australia. ASIC will also be required to record the name of any person that has had a court order made against them under the proposed section on its disqualified persons register and ensure a copy of that court order is retained on the register.
Additionally, the Bill also establishes that a corporation cannot indemnify a director for the legal costs of an unsuccessfully defended action brought by ASIC under the new law.
As applied to New Zealand, the amendments to the Corporations Act 2001 will advance work on common regulatory frameworks between Australian and New Zealand under our Closer Economic Relations agreement.