Emu NL Faces Governance Crisis as Panel Cites Voting Distortions and Regulatory Breaches

• Share placement on day of EGM potentially distorted voting
• Proxy forms favored votes against shareholder resolutions
• Multiple postponements and unclear voting record dates
• Undisclosed proxy recounts raised transparency concerns
• Breach of Corporations Act by a placee failing to lodge timely notice

Background to the Dispute

Emu NL, an ASX-listed mining exploration company, found itself at the centre of regulatory scrutiny following a contentious extraordinary general meeting (EGM) held on 14 May 2025. The meeting was convened after a group of shareholders sought to remove two incumbent directors and appoint new ones, triggering a proxy battle that quickly escalated into a governance crisis.

The company’s board initially scheduled the EGM for 18 March 2025 but postponed it twice, finally holding it in mid-May. During this period, the board issued a significant share placement on the very day of the EGM, raising questions about the timing and intent behind the capital raise.

Controversial Share Placement and Voting Process

On the day of the EGM, Emu issued over 17.6 million new shares to four placees, representing more than 8% of the company’s capital post-placement. The Takeovers Panel found that the timing and manner of this placement likely facilitated the acquisition of a substantial interest by investors expected to support the incumbent directors, potentially skewing the vote outcome.

Compounding concerns, the proxy forms provided to shareholders were problematic. While a generic proxy form lacked personalised shareholder details, an alternative form prepopulated with votes against the resolutions was distributed, making it more difficult for shareholders to vote in favour. This asymmetry raised questions about the fairness and transparency of the voting process.

Proxy Recounts and Market Confidence

Following the EGM, Emu conducted multiple internal recounts of proxy votes, disallowing a significant portion of proxies, over 20% in some counts. These recounts were not promptly disclosed to the market, further eroding confidence in the integrity of the meeting’s outcome. The chairman himself described the meeting as a "disorderly process," highlighting operational challenges in managing the vote tally.

The Takeovers Panel concluded that these factors combined to prevent shareholders and the market from having a sufficient basis to trust the EGM results or the subsequent board composition. This lack of clarity inhibited an informed market’s ability to assess control over Emu shares.

Regulatory Breaches and Next Steps

In addition to procedural concerns, one of the placees, Northmead Holdings Pty Ltd, failed to lodge a required substantial holder notice within the statutory timeframe, breaching the Corporations Act. Emu also delayed providing proxy information as ordered by the Panel, constituting further contraventions.

The Takeovers Panel has declared these circumstances unacceptable and is currently considering what final orders to impose. The decision underscores the importance of transparent governance practices, especially in contested shareholder meetings where control stakes are at play.

Emu’s board has already seen a director resignation and replacement amid the turmoil, signaling ongoing shifts in leadership as the company navigates this regulatory challenge.

Bottom Line?

Emu NL’s governance turmoil signals a critical juncture, with the Takeovers Panel’s final orders poised to reshape shareholder control and market trust.

Questions in the middle?

• What specific remedies or sanctions will the Takeovers Panel impose on Emu NL?
• How will the share placement and voting irregularities affect Emu’s share price and investor confidence?
• Could this case prompt broader regulatory scrutiny of proxy voting and share placements in contested ASX meetings?