The out of court settlement of the continuous disclosure civil proceedings negotiated between the Securities Commission and Nuplex is a good result for all stakeholders.
A win for those shareholders who purchased shares between 22 December 2008 and February 2009, that will now receive compensation.
A win for the Commission against the company, through Nuplex’s acceptance that the senior debt covenant breach was material information that should have been disclosed to the market.
A pragmatic response by the independent directors of Nuplex, to avoid ongoing litigation cost and distraction for company management.
A good result for corporate governance, because the extensive publicity generated by the case has sent a salutary message to boards throughout the country to focus more closely on their continuous disclosure obligations.
The Nuplex litigation was an important test case of the law and was closely followed by listed company boardrooms, company executives and advisers.
Although the pragmatic solution negotiated by Nuplex and the Commission should be regarded as a win on points for the Commission and affected shareholders, the full and final settlement against all parties means that personal liability of directors, and the scope of their reasonable steps defence, will not be resolved by this litigation. There are other cases still before the courts where these boundaries may be clarified.