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.
For those wanting to join the “rebels” it’s at cpamembers.org
Love to see where this ends up, whilst most members probably don’t care about the AGM being in Singapore it’s still a dick move to be wasting our membership fees on going offshore for 5% of the base.
Oh dear, the conversation has gone from Singapore to mud slinging, percentages and fees. Not the venue for this type of banter ladies and gentlemen, remember, professions solve issues internally. Mud slinging does not wash off and leaves lingering issues to rise again at a later date. Maybe ASIC is the answer !!! LOL.
Why is this mud slinging?
Members are asking legitimate questions about how this member funded organisation is being run and management have decided not to answer questions.
And why isn’t this the venue? – and if what we are asking for is so bad, then lets have the resolution out to an EGM in Australia and let members decide if the “mud slinging” is as bad as you say!!!
“Transparency”. Must mean different things to different people. This “post-truth” thing going on is everywhere!
Maybe Alex Malley could resolve the dispute with his members by stepping down after securing a well-paid gig at Channel 9 – God knows he’s on there enough already.
I am not sure that this is a rebel group. I think they are verbally expressing the thoughts of a lot of members, being that Alex Malley is using member funds to promote himself with little benefit to members. A flagrant misuse of member funds!
Being a member of 15 years I for one would back the so called rebel group.
So much about nothing. There is a professional way to lodge complaints and have them heard – just get on with serving your clients and employers and air your grievances be they sound or otherwise in a meaningful forum. Only if you don’t get an open and fair hearing should you consider a more public debate. To date I have heard nothing but noisy innuendo – it’s unbecoming and diminishes the worthiness of things you might legitimately have to say.
How about a remuneration of $5,508,000 (in 2016 CPA annual report) shared between 15 people, with 12 of them directors, who prior to Alex Malleys time at CPA did it voluntarily. Is that noisy innuendo Mark or cold hard facts that the CPA leadership refuse to disclose. How about a NBL sponsorship by CPA of $736,000 when one of CPA’s directors is Chairman of the NBL. How about Alex Malley being personally branded to the detriment of the CPA brand. Maybe its all noisy innuendo?
Hi Brett – the simple thing is that if you have genuine grievances, document them and seek an open, full and efficient response from the Board or whoever handles these things. If you don’t get that then consider writing an open letter. All I am hearing now is ‘some’ people saying they think the Board is paid too much and that the CEO might be preferring his interests over the those of the organisation. The latter in particular is a huge and dangerous allegation. Holding an AGM in Asia seems quite ok and appropriate to me especially since there is streaming available and of course a member’s normal AGM enquiry rights should not be impeded. The law however will govern this integrity process not the Board.
CPA is a large organisation serving a variety of members in Commerce, Public Sector, Public Practice and Academia. Its core message to the public and employers should be about the quality, forward thinking and professionalism of its members so that employers and the public can take assurance in those that choose to belong to the brand. No doubt there are many different ways to run a large member based organisation and promote the brand and members should participate on an ongoing basis in that strategic intent.
Throwing bombs from the sideline I don’t believe is helpful and a more considered approach to any debate and/or concerns should be the first step. True authority exists with the professionalism of the members, not the noisiness and immediacy of media sound bites.
What rubbish Mark!!!!!
We as members have the right to know how our funds are being spent – simple as that!!!
Why can’t I know what Malley is getting paid!
Whys is the Board getting paid well above what similar boards are getting.
Also it is up to the Board to tell us how interviewing Henry Winkler benefits us!
If its all just noise like you say, the Board can respond then we can move on. But they won’t answer.
By the way have you ever worked for the CPA – weren’t you a past president of the NSW branch?
Keep going Brett – you are asking questions most CPAs want answered!!!!!!!!
Keep going Brett – you are on the right track!!!
Just ignore people like Mark – he has missed the memo on transparency in member funded organisations!!!
At the very least we as members have the right to be told what exactly is being done with our membership fees – all salaries, commercial deals and board matters should be made public by default.
If Alex and co are so great, then why not disclose?
I find the salaries paid to the Board are obscene – but worse is this self promotion!!!
Can’t wait to vote on your resolution!!!!!
I did not renew my CPA membership when the CPA required me to charge flat dollar fees rather than % fees for the advice and service we provide for all clients. The CPA has no right to meddle in how we manage our business and charge for our services. We charge flat dollar fees for some clients and % fees for others based on the service needs of each client. If we manage a client investment portfolio it is a similar role to a fund manager so it makes no sense that we can recommend a fund manager who charges a % fee but we cannot assume that role and charge a % fee.
Eager to here more about this John. editor@ifa.com.au
Not much more I can add. It is what it is. I am no longer a CPA member because of their stance on % fees. Perhaps you could give your thoughts on why an adviser who manages client portfolios is any different to a fund manager and any less professional than a financial adviser that charges flat dollar fees for strategic advice ( which we do as well for a flat fee ). My colleagues who I studied finance with at uni many moons ago are now managing alternative funds, trading FX,bonds,options for fund managers. Why shouldn’t I use my education and experience to manage client funds and charge like them ?
Cause simply you do not have the experience or expertise and maybe the insurance to cover it.
You have been an accountant and they have been investment advisers, That is what the regulation is about. Experts being properly represented.
Be an adviser give advice. Leave fund selection up to fund managers. Living and dying by fund selection only ends up in tears.
And before you arc up.. i have 2 finance related degrees and a masters. The best thing they taught me is to not be stupid enough to pick clients investments.
And flat dollar fees are the way forward, why is a clients balance the determining factor in what you charge. It is greed, they have more so i will charge more… How is that a professional attitude?? Or do you want a performance fee, that is even more conflicted…
I completed a double degree with majors in both accounting and finance. I have never practised as an accountant. I have always practised as a financial adviser. Clients with larger portfolios represent larger liability if things go wrong. That is a fact. It is not greedy when you have the capacity to compensate clients when mistakes arise. I have done that. My clients agree to our fees based on the service we provide. Also the % fee is a lower % fee as the portfolio rises. We also charge flat dollar fees. A one size fits all approach will never happen. Too much legacy business and if it ain’t broke don’t fix it. If you want to charge a fee for whatever you offer go right ahead. Don’t expect everyone else to follow you and give up the your’re not professional unless you’re like me attitude. It is unbecoming of a professional.
Same old excuses that have been used in the industry for years..
And a few questions?
Compensate clients? so you have made poor investment decisions before for your clients and had to compensate them. But you think you should continue to tell them what to do.
Next, The liability is no different. The amount changes but the premium on your insurance doesn’t; change.
One last question If you are an adviser and have always been then why are you a member of the CPA, CPA members are accountants. They only been in the financial advice space for a year. Therefore you would of had to have been a CPA to be a member. i,e a qualified accountant.
Sorry but your post does not add up and ring true.
There is another potential explanation P & E.
Perhaps John has been doing what many accountants have been doing for years. Giving unlicensed, undocumented, investment advice.
Oh the irony of forcing your advisers to comply with Corporations Act independence but then not complying with the law yourself.