Here’s a bit of obscure news from the world of Australian finance that probably won’t move markets but does have big implications for the ability of everyone from at-home traders to hedge funds being able to conduct thorough due diligence research.
Listen to the HotCopper podcast for in-depth discussions and insights on all the biggest headlines from throughout the week. On Spotify, Apple, and more.
This week, the government directed the securities regulator ASIC to no longer make available the listed addresses of company directors. This information isn’t freely available, for starters, one must pay for it – that obstacle already leaves such info generally in the orbit of media and investment types.
But this week – using the Bondi terrorist attack as a rationale for why – the government finally ordered ASIC to get rid of this fairly critical element of corporate transparency, after years of lobbying from private industry.
I understand the Bondi attack is still a very sensitive topic and I realise that lives were destroyed and that the event threatens Australians’ sense of comfort and peace wholemeal. But using the Bondi attack as a justification for getting rid of directors’ home addresses is, in my view, complete bullshit.
What a handy excuse, from the same government that kept itself occupied limiting Freedom of Information laws last year. Not a great look.
(Especially not when that watering-down of the laws that enshrine the public’s right to sensitive information was referred to by the Attorney General’s office as a “strengthening” of the laws last year. Slimy stuff.)
The thing is, though, residential addresses are quite a handy tool to use when investigating listed companies, either because one suspects they may be up to a bit of fraud, or because one wants to really check out the board.
This Market Link finance journalist recalls carrying out one such investigation into a company that abandoned a gas well offshore New Zealand, leaving the NZ Government with the bill. The ownership structure of the company that abandoned the well, ASX-listed at the time, was fairly unclear.
I was able to figure out who owned it, though, because I was able to spot a link between two individuals, one of them listed in the Paradise Papers offshore company leaks from a few years back. And what was that key piece of information that allowed me to confirm ownership of the company?
Yep, you guessed it – a residential address.
I’ll let bygones be bygones and not name the individual in question – who, fun fact, lived in a Swanky mansion in the Western Australian suburb of Cottesloe, naturally – but if I hadn’t been able to find that address, I wouldn’t have been able to cross-reference it with other identifying information.
So that’s the journalism point of view, freedom of information, the public has a right to know, blah blah. (I say “blah blah,” but the public does in fact have a right to know, because that’s literally how democracy works, which I think we can all agree is probably still preferable to other systems of governance.)
But these concerns will also be held by short sellers, for one. Putting an impenetrable veil of mystery around Directors may serve the business lobbies representing Directors, but nobody else, really.
So in essence, ASIC this week made it harder for the public to access information on company ownership. A win for the management class, hoo-rah!
Perhaps it’s not particularly remarkable that any country’s government has an interest in giving a few handouts to the business “elites”. But it’s at the expense of everybody else, particularly if anybody directing a company actually does want to commit a little bit of fraud.
How helpful that one now can’t be found. Or confirmed to be living in Australia at all.
While there is obviously a risk of some crazed lunatic finding a director’s address via ASIC’s record search and then carrying out some act of hostility, it’s not like the courts are chock full of cases as to why the last twenty-six years.
Besides, you can always just follow somebody home, too.
Join the discussion: See what’s trending right now on HotCopper, Australia’s largest stock forum, and be part of the conversations that move the markets.
The material provided in this article is for information only and should not be treated as investment advice. Viewers are encouraged to conduct their own research and consult with a certified financial advisor before making any investment decisions. For full disclaimer information, please click here.