Panel Publishes Reasons for Restraining Payment to ALQ Directors [31/07/2001] The Takeovers Panel

Tuesday 31 July 2001

Panel Publishes Reasons for Restraining Payment to ALQ Directors

The Panel has today published its reasons for making an interim order restraining the payment by Liquorland to the ex-directors of Australian Liquor Group Ltd (ALQ) and their associates, for ALQ shares sold into Liquorland's takeover bid.

The Panel received an application by Liquorland in relation to its bid for ALQ on 12 July 2001. Liquorland applied for an interim order restraining the payment by it of the bid consideration to all shareholders of ALQ, and for a declaration of unacceptable circumstances and final orders. Liquorland alleged that disclosure by ALQ during Liquorland's bid of its financial performance was inadequate.

On 17 July 2001, the Panel ordered that Liquorland pay the moneys owing to the former ALQ directors and their "associates" into an interest bearing trust account for a period of 14 days. This period was later extended to 21 days. The order required that Liquorland pay that money, plus the interest, to the former directors and their associates at the conclusion of the 21 day period, unless otherwise ordered by the Panel or a court. The Panel made no orders concerning the payments to other ALQ shareholders, which were due to commence on 18 July 2001.

The Panel gave the "associates" of the former ALQ directors an opportunity to make submissions as to why the consideration for their ALQ shares should be released from the effect of the order. On receipt of evidence that two of the "associates" did not hold their shares on account of the relevant former ALQ directors, the Panel ordered that the money owing to those "associates" be released.

On 27 July 2001, the Panel has ordered that Liquorland release to one of the ex-directors an amount of money equivalent to the accrued interest on the money which would have been paid to that director, apart from the Panel's interim order. This will reduce any hardship caused by the order.

The Panel has issued a further brief to parties in this matter asking whether it is in the public interest for it to pursue its proceedings given the interim orders that it has made. The Panel is currently seeking and considering submissions on this issue.

The sitting Panel in this matter is Ms Alice McCleary, Mr David Gonski and Ms Carol Buys.

Nigel Morris
Director, Corporations and Securities Panel
Level 47 Nauru House, 80 Collins Street, Melbourne VIC 3000
Ph: +61 3 9655 3501
nigel.morris@takeovers.gov.au