Re Crown Diamonds Nl

Crown Diamonds NL (Crown) sought approval from the Supreme Court of Western Australia to convene meetings of its shareholders and convertible note holders to consider a proposed merger with Petra Diamonds Ltd (Petra). The merger involved the transfer of Crown's assets and liabilities to Petra, with Crown shareholders receiving Petra shares in exchange and Crown's convertible note obligations being assumed by Petra. The application, brought under s 411 of the Corporations Act 2001 (Cth), sought orders for convening the meetings, approving the explanatory statement, and providing directions on the conduct of the meetings and distribution of notices. The Australian Securities and Investments Commission (ASIC) appeared and did not object to the schemes in principle.

The court examined whether the explanatory statement provided proper disclosure, as required by s 412(1)(a) of the Corporations Act. It found that the statement contained sufficient information for shareholders and note holders to make an informed decision, including summaries of Crown and Petra's businesses, financial information, risk factors, tax implications, and an independent expert's report. The court also considered whether the schemes were properly proposed, concluding that there was no evidence suggesting the schemes were designed to avoid the provisions of ch 6 of the Corporations Act. The purpose of the schemes was deemed to be a commercially desirable merger, approved by the directors of both companies.

The court exercised its discretion to grant the orders sought, finding no reason to prevent the meetings from convening. The explanatory statement was approved, and directions were given for the convening of the meetings, distribution of notices, and advertising of the meetings. The court made orders in line with the amended minute, allowing the meetings to proceed as proposed.