CPA members mull legal action

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.