ASIC v Rex clash

Dual rep lawyer struck off, Telstra’s $700m AI push

January 16, 2025

👋 G’day

Today’s brief:

  • A WA lawyer has been struck off for dual representation.

  • Israel and Hamas agree to a ceasefire.

  • JPMorgan hits record profit milestones.

Here’s the latest 👇

PRACTICE POINTS

ASIC v Rex in disclosure dispute

  • Rex is in trouble with ASIC, accused of misleading investors about its financial health. The regulator claims the airline's board was well aware of "bewilderingly bad" ticket sales and mounting losses. Now, the directors are facing a misleading and deceptive conduct claim in breach of their ASX continuous disclosure obligations.

  • The ACCC has always preferred structural fixes in mergers—think selling off part of the business. But recent cases, like Chemist Warehouse / Sigma and the now-abandoned Brookfield / Origin deal, show the competition watchdog’s softening stance. In the Sigma deal, the ACCC accepted a behavioural remedy, with Sigma agreeing not to enforce exit restrictions on long-term pharmacy contracts. With the introduction of merger reform legislation, the ACCC’s pivot to more flexible, tailored solutions is a welcome change for businesses.

  • The Federal Government rolled out the Regulatory Initiatives Grid (RIG), a tool aimed at improving coordination of financial sector regulation. The RIG will offer a two-year outlook on regulatory changes, helping financial service providers engage more effectively with the government and regulators.

WORD ON THE STREET

Lawyer struck off for dual representation

  • Perth lawyer Kevin Staffs has been struck off the roll after acting for both sides in a company-director dispute. The WA Supreme Court slammed his cover-up attempt as “worse than the crime”.

  • Maurice Blackburn promotes 49, including 5 to principal.

  • Duncan Webber, ex-KPMG property lawyer, has joined Moray & Agnew’s Canberra office. He’s set to partner with the national property team to tackle client needs across ACT and NSW.

  • Maddocks welcomes back a familiar face. The firm has bolstered its employment, safety, and people practice with a new partner hire from stints at Corrs and Commonwealth Bank.

TALKING POINTS

Israel and Hamas agree to ceasefire

  • After 15 months of torment, Israel and Hamas inked a ceasefire deal. The pivotal agreement will see Hamas release hostages in phases, while Israel frees hundreds of Palestinian prisoners. The deal also paves the way for displaced Gazans to return to what’s left of their homes and promises a surge of humanitarian aid into the war-torn region. It is set to take effect on Sunday. The deal’s catalyst? Apparently, Trump.

  • Impeached South Korean president Yoon Suk Yeol has been arrested after his failed attempt to impose martial law. With 3,000 officers surrounding his residence, a tense standoff ensued. Yeol now faces charges of insurrection, and if convicted, he could be looking at the death penalty or life behind bars.

  • Albanese’s cabinet reshuffle. PM Anthony Albanese has promoted Aged Care Minister Anika Wells to the cabinet and expanded the roles of Amanda Rishworth, Katy Gallagher, and Anne Ally. The reshuffle follows the retirement of Bill Shorten, who moves to the University of Canberra as vice chancellor.

  • The UK government is set to reactivate the Higher Education Freedom of Speech Act, which could hit universities in England with fines for failing to protect free speech on campus.

TREASURY

  • Australia's unemployment rate is expected to rise slightly in December as the hiring pace slows. The ABS is set to release unemployment figures released today.

ASX as at market close. Commodities and crypto in US dollars.

DEAL ROOM

First big Aussie gold deal of the year

  • The first major Aussie gold deal of 2025 is here. Mineral 260 has struck a deal to buy the Bullabulling project near Kalgoorlie from Norton Gold Fields (a subsidiary of China’s Zijin Mining) for $156.5m in cash plus $10m in scrip. The sale price for one of Australia’s largest undeveloped gold projects is nearly 6 times Mineral 260’s market cap.

  • In case you missed it, AV Jennings, the Aussie home builder, is suddenly the hottest property in town. Singapore-listed Ho Bee Land came in with a $391m all-cash takeover offer, just after American giant Proprium Capital Partners made a $374m bid in November. Both want to snap up AV Jennings’ land bank, which could eventually accommodate almost 10,000 lots.

  • Global deal volume took a leap in 2024, with 710 deals over $100m, marking a 15% increase from 2023. The real surge? Transactions between $1bn and $10bn, which saw a 36% jump, with 99 deals in the second half of the year alone. That said, there were plenty of big could-have-beens: BHP/Anglo’s $80bn offer, Woodside/Santos’ $80bn tie-up, and News Corp’s REA/Right Move $12bn deal.

  • Saudi Arabia’s sovereign wealth fund is in talks to buy up to 10% of global streaming giant DAZN, a move that could give the kingdom a significant say in Australian broadcaster Foxtel.

SECTOR SPECIFIC

Telstra’s $700m AI play

🚜 DIGGERS

  • Rio Tinto’s iron ore shipments dip despite annual record exports from WA. Rio saw a 1% drop in Q4 iron ore shipments as China’s economic slowdown and property woes dampened demand. This comes despite record-breaking exports from Port Hedland in 2024, highlighting the complex dynamics in global steelmaking markets.

  • The WA government is handing out $34m across three clean energy projects, with Pilbara Minerals, POSCO, and Port Hedland Iron among the lucky recipients.

  • Regis clears $300m loan early. Gold miner Regis Resources has repaid a $300m loan facility well ahead of its June 2025 maturity, citing a strong $529m cash and bullion balance. The company is now negotiating a fresh revolving credit facility.

🏦 FIN

  • Block fined $128m over Cash App lapses. Afterpay’s parent company will pay a $128.5m fine after 48 US state regulators found its Cash App platform lacked proper anti-money laundering safeguards.

  • With insolvencies on the rise, the ATO is ramping up pressure on businesses behind on repayments, aiming to recover over $35bn in debt from small businesses.

  • Well, banks are killing it – Big banks crushed expectations, with JPMorgan, Wells Fargo, Citi, and Goldman raking in their second-best year ever. JPMorgan stole the spotlight, becoming the first US bank to surpass $50bn in annual profit.

  • The neobank boom isn’t shaking the Big 4’s grip on the market. To compete, smaller Aussie banks will need to scale up, with Qudos CEO Brendan Wright predicting the sector could shrink to just 10 players in the next decade as mergers heat up.

🏡 RETAIL & REAL ESTATE

  • AussieSuper is diving headfirst into European real estate and logistics, snapping up a 50% stake in a $1.4bn European portfolio from Canada’s Oxford Properties Group. It’s also acquired Oxford’s 50% stake in M7 Real Estate, the firm managing 76 assets across Europe. With $56bn in real estate, 40% of which is invested internationally, these deals mark AussieSuper’s first foray into European logistics.

  • Private credit and real estate group Metrics Credit Partners has joined forces with Billbergia Group on a multi-billion-dollar luxury apartment and hotel project set to overlook Hyde Park in Sydney.

  • Star Entertainment staff are fuming over exec salaries and bonuses. In an email to The Australian, Queensland-based employees vented that they're the ones "keeping the casino running," yet they're stuck with "low wages" far below industry standards.

  • Dairy nations cry foul over Canada’s milk ‘dumping’. Dairy giants from New Zealand, Australia, and the US are accusing Canada of flooding global markets with cheap milk products. They’re now urging their governments to step in and tackle the trade imbalance.

📱 TECH

  • Telstra is set to invest $700m in rolling out AI across its operations, with Accenture brought on to lead the charge. As one of the largest AI deployments by an Australian company, the move could result in job cuts—especially after Telstra axed 2,800 positions last year.

  • The SEC is suing Elon Musk for waiting too long to disclose his 2022 Twitter stake. Musk delayed revealing his initial 5% purchase by 11 days, during which time he snapped up another $500m worth of shares at a discount. By the time he finally made the disclosure on April 4, 2022, his stake had grown to 9.2%, sending Twitter’s share price soaring by 27%.

P.S.

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