Australian IPOs And Takeovers: Liability Has Increased, Defences Are Eroded

Liability for companies launching an Australian IPO or takeover changed significantly this year—with not so much as a murmur of protest from the market. Due diligence just got more important, but the reason may surprise you.

Liability Has Increased

Civil penalty liability now affects prospectuses and takeover documents. That means substantial fines, which are now:

• For individuals—the higher of $1.05 million or three times the benefit derived/detriment avoided;
• For companies—the higher of $10.5 million, three times the benefit derived/detriment avoided or 10% of annual turnover (max. $525 million).

It also means:

• Disqualification sanctions for directors and management.