Page 3430 - Week 09 - Thursday, 21 August 2008
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activity or to perform an activity in a way that is different from the way in which the directors intend to perform the activity; and
(b) the directors of the company advise the voting shareholders that compliance with their request would not be in the best commercial interest of the company;
the voting shareholders may, by written direction, require the company to comply with the request.
(2) The company must comply with a lawful direction.
It further goes on to say:
(3) The directors of a company are not taken to be in breach of any duty under a law or the constitution of the company only because of their compliance with a lawful direction.
But:
(4) The Portfolio Minister must present to the Legislative Assembly—
(a) a copy of a direction; and
(b) a statement setting out the estimated net reasonable expense of complying with it …
(5) The Territory must reimburse the company for the net reasonable expense of complying with a direction.
Our recommendation addresses this. It points out the concerns that are raised when the shareholders have what could be an apparent conflict of interest in their ministerial roles. We propose that the Assembly set up a mechanism to deal with that.
We have suggested that the government have a look at the Territory-owned Corporations Act and that section 17 (4) be amended to require the portfolio minister to “provide a copy of a direction and a statement setting out the estimated net reasonable expense of complying with it within five sitting days of the issue of a direction”—rather than 15, as is currently in the legislation.
We believe, and we stated, that we need a mechanism whereby shareholders can resolve differences of opinion. One of the things raised by the CEO was that the shareholders apparently did have different opinions about the direction of the company and she saw that as one of the reasons for uncertainty about its future.
We also noted the lack of a draft business plan, which apparently was not prepared for some time. We noted that it should be an absolute requirement for a territory-owned corporation to supply the voting shareholders with a draft business plan and that these should be responded to within 30 days. That was another issue. The shareholders were very lackadaisical. Some of the comments by Mr Stanhope were in the proceeding slowly stage. We thought they thought that the company should have just known that it was meant to tread water during the period while it was wondering about its future.
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