ALP Proposed amendments to Corporate Law Economic Program Audit Reform and Corporate Disclosure Bi

4 June 2004

TO: Democrats

Senator Andrew Murray
Senator for Western Australia
Parliament House
CANBERRA ACT 2600

Dear Senator Murray,

ALP Proposed amendments to Corporate Law Economic Program (Audit Reform and Corporate Disclosure) Bill 2003 (CLERP 9 Bill)

Thank you for meeting with our representatives in Canberra on Monday 31 May. It was good to exchange views on the CLERP 9 Bill and discuss more general director issues.

I enclose a copy of our response to the ALP's proposed amendments to the CLERP 9 Bill. As you will see from our response, we do not support the proposed prohibition on the granting options to non-executive directors. We consider that such a ban would disadvantage start-up companies which are cash poor. If the prohibition is introduced, we propose that one way of dealing with the matter would be to prohibit the granting of options to NED's of companies in the top 300 listed companies.

We also enclose a copy of our response to Treasury dated 31 May 2004 relating to their 18 May 2004 request for submissions on the draft due diligence defence for breaches of the continuous disclosure regime. You will note that our proposed drafting adopts an existing regime in section 189 of the Corporations Act and it provides for 'reasonable reliance' concept. Your concern that there be 'checks and balances' is reflected in the insertion of a requirement that good faith and independent assessment is demonstrated.

Again, thank you for meeting with us. Please contact me if you have any questions on (02) 8248 6601.

Yours sincerely,

Ralph Evans
CEO