CPA members mull legal action

CPA members mull legal action

The rebel group within CPA’s membership has sought legal advice as to whether the decision to hold the AGM in Singapore might be in contravention of the Corporations Act. 

According to a document circulated among members, seen by ifa, legal advice has been sought as to whether litigation against CPA Australia’s leadership could be mounted by the members.

The allegation relates to a possible breach of Section 249R of the Corporations Act, which states that a “meeting of a company’s members must be held at a reasonable time and place”.

While not a “black and white case”, the letter indicates that there is an argument for contravention of the law since more than 75 per cent of members reside in Australia and just 5 per cent in Singapore.

The law is intended to stop corporate boards from preventing full discussion or blocking the voting rights of members or shareholders, which is a key allegation of the rebel group.

However, the document also notes that a challenge by members might be difficult given the “financial muscle” of the CPA executive, saying “we already know [CEO Alex] Malley’s propensity to waste our money with the $1.5 million he spent recently on legal fees in a stoush with the institute in NZ”. It asks whether some members may be willing to fund the challenge out of their own pockets.

Should a legal challenge not be undertaken by the rebels, a special members resolution will be sought to reduce directors’ fees by 50 per cent, or if necessary, a spill of the board.

Top barrister Dom Hogan-Doran SC recently took to Twitter to predict that an “application for [an] injunction pursuant to [the act]” might be “next” for the beleaguered professional association.

Lack of information about the progress and funding of the CPA Australia Advice subsidiary – a licensee with 19 authorised representatives that mandates compliance with the legal definition of independent financial advice – is one of the issues that has angered members.

 

CPA members mull legal action
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