ASIC has issued a stop order against National Capital Corporation Pty Ltd (NCC) to prevent NCC from buying shares in Telstra Corporation Ltd (Telstra) in connection with any unsolicited offers made to Telstra shareholders in the period up until 26 November 2010.

NCC made approximately 6,000 unsolicited offers between 22 October and 26 November 2010. An example included an offer by NCC of $211.47 for 159 Telstra shares that was half their market value of $422.94 at that time. Another offer was for a premium at $3.01 per Telstra share with payment terms of 10% within 14 days and the balance to be paid within 26 weeks. Where an offer involved deferred payment, ASIC was particularly concerned that investors may not appreciate that any delay in payment may erode the value of the offer or present a risk that payment in full for the shares may not be received.

On 13 December 2010, and subsequent to NCC making the unsolicited offers, the Corporations Act and Regulations were amended. Companies are now able to refuse requests for copies of their share register when it is being sought for an ‘improper purpose’. These improper purposes are defined in the Corporations Regulations and include the making of an unsolicited offer to purchase shares. It is also now an offence for a person to use a share register for an improper purpose. Following these changes, ASIC expects that these kinds of offers will cease.

Further information about these changes and how they impact upon access to and use of shares registers is available from the website of the Hon David Bradbury MP, Parliamentary Secretary to the Treasurer.

ASIC encourages retail investors to consult its consumer website, FIDO, at www.fido.gov.au for more information on how to cheaply and easily sell shares at the market price. The FIDO website also contains further information on unsolicited share offers.