VIC Corporations Act: Can an Old Board prevent a New Board from Sitting?

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Freddo Frog

Member
27 April 2017
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Hi,

I have a general Corporations Act set of questions relating to handovers from Old Boards to New Boards:

Say that members of an organisation subject to the Corporations Act vote OUT an old Board (i.e. a "coup" as some call it)...

Can this "old Board" prevent the new Board members from taking their seats? i.e. invoke proxies... More detail follows:

Many companies and/or organisations issue Proxies for AGM's with their voting slips - and these proxies are often returned with the voting slips (on average 1/3 by research) with their proxy on all matters going to The Secretary or President of the Organisation.

Secretaries of organisations are often appointments - political appointments...

An AGM is a time when old Boards hand over to new Boards. It is also a time when motions from the floor via the members can be enacted. Yet there is a "tween" moment where the "Old Board" has control and The New Board has yet to take control.

Is it legal to use this means to put an entity subject to The Corporations Act into Self-Administration - with The Old Board or components of The Old Board - appointed as administrators?

Can members of an organisation move a motion of No Confidence in a NEWLY elected Board at an AGM - using proxies handed to outgoing presidents and secretaries - thus preventing the New Board from sitting?

I ask this as I believe that it is in the public interest to have this issue clarified - as I believe that an organisation that is in the media and under Parliamentary scrutiny is planning this to prevent their misdeeds from being exposed.

Note that the organisation has a standard Constitution that does not cover handovers... This organisation also has a history of IGNORING the law knowing that ASIC is far too overwhelmed to even look at the numerous complaints put before it.

Regards,

Freddo
 
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Rob Legat - SBPL

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16 February 2017
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There's a few moving parts to what you're asking. However, the first and foremost point would be: why would the members, who have just elected a new board, then immediately seek to oust them?
 

Freddo Frog

Member
27 April 2017
2
0
1
This issue is the members / shareholders have made their case clear... by VOTING THEM OUT and leaving only one member of the Old Board left. But there are some hard heads that feel they have been misheard and wrongly dealt with.

Periods under electoral appeal guidelines have passed ...

So its not members ... Its "old guard" that refuse to go ...

My concern is do we have a matter that should go immediately to ASIC and perhaps Parliament for immediate attention?
 

Rob Legat - SBPL

Lawyer
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16 February 2017
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Gold Coast, Queensland
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If the vote was validly held under the requirements of the Corporations Act and the company Constitution, the ousted directors are no longer directors of the company. They're there by the grace of the members; they don't ultimately call the shots.

Make sure you have to meeting notes in order, and have one of the new directors lodge the requisite Notification of Change of Officeholders with ASIC. Once that's done, perhaps a written notice to the 'old' directors causing issues to inform them they have been removed as officeholders and no longer have any authority to bind the company in that respect.