Ann: Suspension from Official Quotation, page-15

3. Listing Rules 11.1.2 and 11.1.3: ASX’s discretionary powers
3.1 The policy objectives of Listing Rules 11.1.2 and 11.1.3
Listing Rule 11.1.2 confers on ASX the discretion66 to require a significant change to the nature or scale of a listed
entity’s activities to be approved by the holders of its ordinary securities. As mentioned previously, the rule was
primarily designed to allow ASX to regulate “back door listings”. While ASX can exercise its discretion in other
circumstances, it is generally reluctant to do so, unless there are clear and compelling reasons to justify that course
of action. This reflects the following considerations:

 The Corporations Act and the Listing Rules already specify an extensive range of transactions that are
deemed to be so significant that they warrant the approval of security holders. In the case of the Corporations
Act, these include name changes, changes to company type, constitutional changes, alteration of class
rights, schemes of arrangement, reductions of capital, a voluntary winding up, capital reconstructions, most
buybacks, the giving of some financial assistance in relation to an acquisition of shares, some acquisitions
and partial takeovers, some retirement benefits and some related party transactions. 67 To this catalogue,
the Listing Rules add a disposal of a main undertaking, various transactions with persons in a position of
influence, some security issues and some option reconstructions.68

 Under the Corporations Act and the constitution of most listed entities,69 the directors are charged with the
responsibility and the authority to manage the business of the entity and to make decisions on its behalf on
all matters other than those that are specifically reserved to security holders under the Act, the Listing Rules
or its constitution.70

 Given that responsibility and authority, most listed entity security holders would expect their directors to be
proactively managing the entity’s portfolio of businesses including, where appropriate, expanding or culling
that portfolio, in the interests of the entity and its security holders.

 The imposition of a requirement that a commercial transaction otherwise within the authority of the directors
must be submitted to security holders for approval will invariably introduce additional transaction costs, as
well as delays and uncertainties that add risk to the transaction. In some cases, it could even threaten the
transaction’s viability or success. These added costs and risks could well be contrary to the interests of the
entity and its security holders.