Mobile Asset Minority Shareholder Successfully Challenges Drag-along Provisions Before The Takeovers Panel

In Mobile Asset Holdings Ltd [2026] ATP 7, the Takeovers Panel considered a situation where the Board, directors of which represented 50%+ of the shareholdings in the company, put a resolution to shareholders for a constitutional amendment which would enable them to compel all shareholders to sell their shares (aka drag-along rights) without the usual guardrails. This blank cheque approval request was most likely going to be approved, given the voting majority who benefited from it were themselves voting, but for the successful application to the Takeovers Panel of an inpidual applicant.

Drag-along rights are a coercive power, and as such, are rarer in the context of a company with 50+ shareholders as those companies are caught by the takeovers provisions in Chapter 6 of the Corporations Act which seek to ensure that control passes in circumstances where all shareholders have been given adequate and equal information and opportunity to participate. However, with the progression of