ppn out of time to call sgm

The shareholders who lodged a request for a SGM under section 249D(1)(a) of the Corporations Act 2001 confirmed that the request sent by registered mail was received at the PPN registered office on 6 June 2012.

Under sub-section 249D(5) of the Act, the directors must call the GM within 21 days after the request is given to the company. The meeting is to be held not later than 2 months after the request is given to the company.

As the 21 days specified in the Act expired on Wednesday 27 June 2012, what happens now?

Under Section 249E, where directors fail to call general meeting within 21 days after the request is given to the company, Members with more than 50% of the votes of all of the members who make a request under section 249D may call and arrange to hold a general meeting at the Company's expense.

Sub-section 249E(5)
The company may recover the amount of the expenses from the directors. However, a director is not liable for the amount if they prove that they took all reasonable steps to cause the directors to comply with section 249D. The directors who are liable are jointly and individually liable for the amount. If a director who is liable for the amount does not reimburse the company, the company must deduct the amount from any sum payable as fees to, or remuneration of, the director.

The PPN directors need to take due attention and care in discharging their duty to represent the interests of ALL shareholders. The SMH article dated 7 May 2012 titled "Accountability in the boardroom" talks about the High Court's decision regarding former James Hardie directors

"....... Potential directors should be aware that they will be held personally responsible, facing possible fines or disqualification, if they fail in their duty to protect the interests of shareholders. They will be required to read, digest and interrogate board minutes and company statements before signing off on them. But really, if they weren't, what would they expect to be paid for?....."