UK: England and Wales: the extraterritorial effect of section 236 of the Insolvency Act 1986

Judgment was delivered earlier this week by Adam Johnson QC (sitting as a Judge of the High Court) in Wallace v Wallace [2019] EWHC 2503 (Ch). At issue was whether an order under section 236 ("Inquiry into company’s dealings, etc.") of the Insolvency Act 1986 could be made against an individual resident abroad. To put this another way: does section 236 have extraterritorial effect? The existing authorities presented, the Judge noted, "a somewhat fragmented picture" (para. [46]) but he concluded, with respect to the power to order the production of "any books, papers or other records" under section 236(3), that an order could be made against an individual resident outside of the United Kingdom.

UK: FRC says Audit Transparency Reporting is ineffective

The Financial Reporting Council has published the results of its review of audit firm transparency reporting: see here (pdf). The FRC reviewed, amongst other things, the 2017 Transparency Reports for each of the 33 audit firms that audit a public interest entity and which, therefore, are subject to the requirement to prepare a Transparency Report (see, now, EU Regulation 537/2014, article 13). The FRC identified five firms - unnamed in the report - that had failed to publish a Transparency Report notwithstanding the requirement to do so.

The FRC has concluded that audit transparency reporting is ineffective, with Transparency Reports seen by many firms as a marketing opportunity (rather than an accountability or compliance document) and the Reports themselves remaining unread by the intended beneficiaries (principally investors and audit committee members). A review of the current requirements will begin in 2020.

Australia: ASIC report on corporate finance regulation

The Australian Securities and Investments Commission has published its latest report on its corporate finance oversight activities for the period January to June 2019: see here (pdf). The report notes, amongst other things, that ASIC asked for amended or additional disclosure in more than a quarter of the prospectuses lodged during this period. Under the heading of corporate governance, the report outlines what ASIC has recently done to clarify its policy concerning the disclosure of the risk and opportunities associated with climate change. 

Singapore: Court of Appeal considers the prohibition against a company acquiring its own shares

The Court of Appeal gave judgment a few days ago in The Enterprise Fund III Ltd and others v OUE Lippo Healthcare Ltd (formerly known as International Healthway Corp Ltd) [2019] SGCA 48: see here (pdf). The decision is important as it has become the leading authority on the prohibition, within sections 76 and 76A of the Companies Act (Cap 50, 2006 Rev Ed), against a company acquiring its own shares. Amongst the specific matters considered by the court were the breadth of an indirect acquisition (under section 76(1A)(a)(i)) and the scope of the saving provision (in section 76A(1A)) for a disposition of book-entry securities.

France: AMF consultation on squeeze outs

AMF - Autorité des Marchés Financiers, the financial market regulator - has begun a consultation on squeeze outs: see here.