ASIC Intervene In Network Ten Collapse
The corporate regulator has dramatically intervened into the appointment of the administrator, KordaMentha.
A Federal Court hearing has been called by KordaMentha to apply for an extension of the administration period after the struggling network was placed into administration last month.
Monday’s hearing follows an announcement from Lachlan Murdoch and Bruce Gordon, earlier this month, stating that they had made a bid in an attempt to take over struggling Network Ten.
At the hearing, the corporate regulator raised concerns about the independence of KordaMentha ahead of its appointment as the Network Ten administrator. As reported by the Sydney Morning Herald, ASIC argued that KordaMentha might have a “reasonable apprehension of bias” because of “the work that’s been done by KordaMentha prior to their appointment”.
The court has heard that the board were in negotiations with 21st Century Fox and the Commonwealth Bank over the recapitalisation of a $200 million facility. The Court has also heard that Lachlan Murdoch and Bruce Gordon threatened to sue the directors of Network Ten if they decided to go ahead with these negotiations. It is alleged that the threat made by the Billionaires was made just two days before they announced their rescue package for the struggling media company.
It is on these grounds that ASIC have sought to argue that there has been a reasonable apprehension of bias. However, counsel for KordaMentha has argued that administrators are highly supervised and did not have a pre-existing relationship with the board of Network Ten.
The corporate watchdog will continue to conduct its review under its merger review guidelines and hear submissions from interested parties by July 24. It is expected a decision may be made by August 24. Interestingly, this date will be five days before the additional funding expires.
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Zac is a consultant at Lawpath, Australia’s largest and fastest growing online legal platform. Since joining Lawpath, Zac has assisted 1000s of startups and small business’s with their legal needs.