Takeovers Panel Orders Emu NL to Rerun Shareholder Vote Amid Governance Failings

Background to the Panel's Intervention

Emu NL's extraordinary general meeting (EGM) held on 14 May 2025 has become a focal point for corporate governance scrutiny after the Takeovers Panel declared the circumstances surrounding the meeting unacceptable. The Panel's investigation revealed that the timing and manner of a substantial share placement on the very day of the EGM raised serious concerns about the integrity of the vote.

Specifically, Emu issued over 17.6 million new shares to four placees on the EGM day, a move the Panel found likely facilitated the acquisition of a significant interest by parties expected to support the incumbent board. This issuance, combined with the handling of proxy voting and multiple postponements of the meeting, undermined shareholder confidence and distorted the democratic process.

Proxy Voting and Meeting Conduct Under Fire

The Panel highlighted that Emu did not update or clarify the record date for voting after postponing the EGM twice, creating confusion among shareholders. More troubling was the fact that proxy forms were prepopulated with voting directions marked "AGAINST" the resolutions to remove directors, making it more difficult for shareholders to vote in favour. This approach, coupled with a lack of transparency around proxy counts and recounts, cast doubt on the accuracy and integrity of the voting results.

One of the placees, Northmead Holdings Pty Ltd, also breached regulatory requirements by failing to lodge a substantial holder notice on time, adding to the governance concerns.

Orders for a New Meeting and Enhanced Voting Procedures

In response, the Takeovers Panel has ordered Emu NL to convene a new general meeting to reconsider all resolutions from the May EGM except the removal of Mr Roland Bartsch, who resigned shortly after the original meeting. To restore shareholder trust, the Panel mandated several reforms, electronic voting must be permitted; proxy forms must be pre-filled with shareholder details but free of any voting direction bias; and an independent scrutineer appointed to oversee vote counting and proxy validity.

Importantly, the shares issued on the day of the original EGM and any further shares issued before the new meeting are barred from voting, ensuring no undue influence from recent placements. Emu is also restricted from postponing or cancelling the new meeting without the Panel's consent, underscoring the seriousness of the situation.

Implications for Emu NL and Shareholders

This intervention by the Takeovers Panel signals a significant rebuke of Emu's governance practices and highlights the regulatory emphasis on fair and transparent shareholder voting processes. The new meeting, to be held within 30 days of the notice issuance, will be closely watched by investors and market participants as a test of Emu's commitment to restoring confidence and complying with corporate governance standards.

While the Panel has left open the possibility of further orders following the new meeting, the immediate focus is on ensuring an efficient, competitive, and informed market for Emu shares. The outcome may well influence the company's board composition and strategic direction.