THERE'S something fairly scary about watching a junior government minister reverse a High Court judgment, but in fact Chris Bowen is only doing what the High Court said the government could always do and tweaking legislation to rank secondary market purchasers of shares on the same level as original prospectus investors.
What he wants to do, and some shareholders' rights have taken a bit of a dive in the process, is to keep investment funds coming into Australian companies by trying to head off a reportedly growing mass of potential class actions pursued by litigation funders by ranking their claims one step lower than previously down the chain of priorities that company liquidators have to deal with.
As one expert put it yesterday, it's a slap in the face for shareholders because they can't now be found to rank above other shareholders even if they have been misled.
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