The Australian government’s Takeovers Panel has made final orders in relation to an application dated March 21 by Haydn Von Maltitz in relation to the affairs of JSE- and ASX-listed DRA Global.

On May 9, the panel made a declaration of unacceptable circumstances in relation to the affairs of DRA.

In March, Engineering News reported that the panel received an application from Maltitz, which said that three senior members who had formed a consortium had infringed on the Corporations Act, and along with the shareholders who had entered into irrevocable undertakings, had formed an unlawful association to acquire an interest of more than 20% in DRA.

Von Maltitz also claimed that these shareholders were given information that was not shared with all shareholders, and that no other party had a "reasonable and equal opportunity" to respond.

He was hoping the panel would restrain the consortium and its associates from exercising any voting or other rights attached to their DRA shares, or from acquiring more shares in the company, and that ultimately, the panel order that the DRA shares held by these associated be bested in the Australian Securities and Investment Commission for sale, and that the irrevocable undertakings be declared void.

Now, the panel says, that by no later than February 17, Alistair Hodgkinson, Darren Naylor, James Smith and Brian Dowding were associated for the purpose of controlling or influencing the composition of DRA’s board and the conduct of DRA’s affairs.

Moreover, as a result of the association between these parties, the voting power of each increased to about 11.27%.

Also, Hodgkinson, Naylor and Smith and each shareholder providing a voting undertaking were associated for the purpose of controlling or influencing the composition of the board of DRA.

It also considered that, owing to the association between Hodgkinson, Naylor and Smith and each other associated shareholder, the voting power of each of these three increased above 20%.

Moreover, these three acquired a relevant interest in the shares of each other associate shareholder and breached Section 606.

Lastly, all four parties had breached Section 671B by failing to disclose their aggregate voting power in DRA as a result of their association and changes to their aggregate voting power as a result of the voting undertakings.

The panel says it found that DRA was aware of the breaches but did not bring an application to it. 

The panel says it also considered that the market had not been adequately informed, or informed in a timely manner, about these matters.

ORDERS

The panel has made orders that all four disclose in the form of a substantial holder notice their association in relation to DRA, including, in the case of Hodgkinson, Naylor and Smith, their association with the other associated shareholders.

Also, in the event that the four are of the view that they are no longer associated with each other, or the other associated shareholders if applicable, they disclose in the form of a substantial holder notice such information, including how and when their association ceased.

Moreover, DRA must disclose, in an ASX announcement, the panel’s decision, DRA’s knowledge of the circumstances found to be unacceptable and provide an update of DRA’s management and operating model.

Each of the four and their associates must be restricted from requisitioning a DRA shareholder meeting for six months, being appointed as a director of DRA for a period of six months and exercising their voting rights in shares in DRA for a period of six months.

The panel says it is still considering submission from the parties as to whether a costs order should be made.