‘Idiot’ ASX directors to be protected in treasurer’s new plan

Experts have warned treasurer Josh Frydenberg’s proposal to weaken public disclosure laws will let ASX companies get away with duping retail investors.

Continuous disclosure laws make it illegal for directors of ASX-listed companies to withhold information that may affect the share price.

Last year, Frydenberg temporarily relaxed some obligations for public companies in response to the COVID-19 pandemic. This included a partial reprieve from continuous disclosure requirements.

This week, the federal treasurer proposed converting that into permanent law, by requiring that shareholders can only sue if a director violated the obligations with “knowledge, recklessness or negligence”.

In other words, claiming ignorance could…