Commonwealth Numbered Acts

CORPORATIONS ACT 1989 No. 109 of 1989 - SECT 705

705. (1) Where:

   (a)  a person proposes, or 2 or more persons together propose, to send a
        takeover offer, or to cause a takeover announcement to be made, in
        respect of shares in a company;

   (b)  the person, or either or any of the persons, referred to in paragraph
        (a), or an associate of the person or of either or any of the persons,
        or, if the person or either or any of the persons or an associate of
        the person or of either or any of the persons is a body corporate, an
        officer of the body corporate or an associate of such an officer:

        (i)    makes or issues an oral or written statement to the public, or
               publishes an advertisement, relating to a prescribed matter; or

        (ii)   sends a document relating to a prescribed matter to any of the
               holders of shares in, or of renounceable options or convertible
               notes granted or issued by, the target company; and

   (c)  there is in the statement or advertisement, or in the document, matter
        that is false in a material particular or materially misleading; the
        person who made or issued the statement, published the advertisement
        or sent the document contravenes this subsection.

(2) Where:

   (a)  the directors of a company have reason to believe that a person
        proposes, or 2 or more persons together propose, to send a takeover
        offer, or to cause a takeover announcement to be made, in respect of
        shares in the company;

   (b)  the target company or a body corporate that is related to the target
        company, or an officer of the target company or of such a body
        corporate or an associate of such an officer:

        (i)    makes or issues an oral or written statement to the public, or
               publishes an advertisement, relating to a prescribed matter; or

        (ii)   sends a document relating to a prescribed matter to any of the
               holders of shares in, or of renounceable options or convertible
               notes granted or issued by, the target company; and

   (c)  there is in the statement or advertisement, or in the document, matter
        that is false in a material particular or materially misleading; the
        person who made or issued the statement, published the advertisement
        or sent the document contravenes this subsection.

(3) Where:

   (a)  a takeover offer is sent, or a takeover announcement is made, in
        respect of shares in a company;

   (b)  at any time during the period beginning when the takeover offer is
        sent or the takeover announcement is made and ending at the end of the
        offer period, a person to whom this subsection applies:

        (i)    makes or issues an oral or written statement to the public, or
               publishes an advertisement, in connection with the offers under
               the takeover scheme or in connection with the takeover
               announcement, relating to a prescribed matter; or

        (ii)   sends, in connection with the offers under the takeover scheme
               or in connection with the takeover announcement, a document
               relating to a prescribed matter to any of the holders of shares
               in, or of renounceable options or convertible notes granted or
               issued by, the target company (other than a document required
               by this Chapter to be so sent); and

   (c)  there is in the statement or advertisement, or in the document, matter
        that is false in a material particular or materially misleading; that
        person contravenes this subsection.

(4) The persons to whom subsection (3) applies are:

   (a)  the offeror or an associate of the offeror;

   (b)  the target company;

   (c)  an officer of the target company or an associate of such an officer;
        or

   (d)  if the offeror or an associate of the offeror is a body corporate-an
        officer of the body corporate or an associate of such an officer.

(5) For the purposes of subsections (1), (2) and (3):

   (a)  a reference to a document includes a reference to a disc, tape,
        cinematograph film or other article from which sounds or images can be
        reproduced; and

   (b)  a prescribed matter is a matter relating to affairs of, or to
        marketable securities issued or to be issued by:

        (i)    the target company or a body corporate that is related to the
               target company;

        (ii)   the offeror or a body corporate that is related to the offeror;
               or

        (iii)  any other offeror in relation to the target company, or any
               body corporate that is related to such an offeror.

(6) It is a defence to a prosecution of a person for a contravention of
subsection (1), (2) or (3) if it is proved:

   (a)  that, when the statement was made or issued, the advertisement was
        published or the document was sent, the person:

        (i)    believed on reasonable grounds that the false matter was true;
               or

        (ii)   believed on reasonable grounds that the misleading matter was
               not misleading; and

   (b)  that:

        (i)    on the date of the information, the person so believed; or

        (ii)   before that date, the person ceased so to believe and as soon
               as practicable gave reasonable notice containing such matters
               as were necessary to correct the false or misleading matter.

(7) A person who contravenes subsection (1), (2) or (3), whether or not the
person has been convicted of an offence in respect of the contravention, is
liable, subject to this section, to pay compensation to a person who acts, or
refrains from acting, on the faith of the contents of the relevant statement,
advertisement or document for any loss or damage suffered by that person by
relying on the false or misleading matter.

(8) It is a defence to an action under subsection (7) if:

   (a)  any matter referred to in paragraph (6) (a) is proved; and

   (b)  where the action is brought by a person who acted on the faith of the
        contents of the relevant statement, advertisement or document, it is
        also proved that:

        (i)    when the plaintiff so acted, the defendant believed as
               mentioned in subparagraph (6) (a) (i) or (ii); or

        (ii)   before the plaintiff so acted, the defendant ceased so to
               believe and as soon as practicable gave reasonable notice
               containing such matters as were necessary to correct the false
               or misleading matter.