Officers’ pay shock

👋 G’day

Today’s brief:

• Company officers exposed to cost orders for Corp Act breaches.

• Fortescue doubles down on iron ore, while BHP & Rio shift gears.

• KordaMentha strengthens defence and security advisory.

And we’re back to the work week. Here’s what you need to stay ahead. 👇

PRACTICE POINTS

Company officers pay for breaches

• Company officers who inadvertently breach the Corps Act may be slapped with personal cost orders. The company in question failed to lodge its Annual Report and comply with fundraising disclosures. Despite the inadvertent (and not dishonest) breaches of the Corps Act, the WA Supreme Court didn’t let officers off the hook in Re Sprintex Ltd (No 2) [2025] WASC 15. Repeatedly failing on disclosures isn’t just a slap on the wrist—it could cost officers personally.

• Mark your calendars. ASIC’s showdown with Star Casino’s entire board kicks off Feb 10. The regulator alleges breaches of directors' duties, claiming the board failed to address money laundering risks. Federal Court Judge Michael Lee—yes, the same one from Bruce Lehrmann vs. Channel 10 case—is presiding over this one.

• Two Adelaide homebuyers are set to move into their long-awaited townhouses after an SA court ruled in their favour against developers Ameronix Pty Ltd and Treana Holdings Pty Ltd. The buyers alleged the developers failed to use “reasonable endeavours” to meet the sunset date, then tried to terminate the contracts to resell the townhouses at higher prices during a property boom. This case could spark fresh scrutiny—and maybe even reform—around the use of sunset clauses in contracts.

• ASIC also targets the private credit boom. The private credit sector, now worth $1.5tn globally and $200bn in Australia, is under ASIC’s microscope. As firms rake in big fees and promise high returns, ASIC is probing their data, fees, and analysis, amid growing concerns over transparency, liquidity, and defaults—especially with hefty investments pouring into property.

WORD ON THE STREET

KordaMentha boosts defence advisory

• Consulting and insolvency giant KordaMentha has lured senior KPMG partners Mike Kalms and Joshua Rodgers to head up a new defence and national security consulting practice. Their appointments expand Korda Mentha’s push into government, health, and education advisory.

• Sparke Helmore names new casualty insurance partner.

• A cautionary tale for lawyers: carelessness with client funds comes with consequences. A WA lawyer was hit with a misconduct ruling over a $2,000 blunder. ‘Grossly careless’ submissions for a client’s costs was the culprit that warranted a seven-month suspension and a $10,000 cost order.

• How do you stand out in a job application? Hamilton Locke partner Nick Humphrey is on the hunt for junior lawyers with energy, drive, and hustle. On CVs, he’s looking for personality—think travelling, elite sports or entrepreneurial venture.

• National firm Lander & Rogers has a new projects partner based in the Sydney office.

TALKING POINTS

DeepSeek ignites AI space race

• Is AI the new space race? The rise of DeepSeek, a new Chinese AI app, has sent shockwaves through the tech world, overtaking giants like ChatGPT to become the top-rated free app on Apple’s App Store. The Chinese AI firm can train models to get similar results to those achieved by American rivals but using fewer chips. The app’s surge has prompted a sell-off of shares in major tech companies and forced Wall Street to rethink Silicon Valley’s dominance in the gen AI race.

• Nvidia shares plunged 18%—their worst drop since 2020—on investor jitters over Chinese AI startup DeepSeek. The sell-off wiped a record US$560bn ($955bn) from its market cap. Embrace for more turbulence as Microsoft, Meta, Apple and Tesla all release earnings this week.

• The anti-ESG movement is here. Cbus, the construction super fund, warns it may water down its climate targets and how it engages with companies on sustainability amid a retreat from US corporates on climate pledges.

• PM Anthony Albanese’s Labor Party is slipping in the polls despite a summer blitz. Newspoll has voter support for Labor at 49%, trailing the opposition coalition’s 51%. December’s poll had them neck and neck at 50%.

TREASURY

• 70% of money markets predict the RBA will cut the target rate at its February meeting. And this week is key because price data is scheduled for Wednesday.

DEAL ROOM

Fortescue eyes Red Hawk

• Fortescue's subsidiary will acquire all of the shares in Red Hawk Mining for a cash bid of $1.05 per share, which will increase to $1.20 per share if Fortescue acquires a 75% interest in seven days via an off-market takeover bid. That’s an attractive 48% premium to Red Hawk’s 30-day VWAP and ~$254m implied price tag. Thomson Geer acts for Fortescue's sub, according to announcements. 

• The Trump administration is pushing for Oracle to step in to keep TikTok alive in the US. The proposed deal allows ByteDance, TikTok’s China-based parent, to maintain a stake, while Oracle takes control of data collection and software updates. Meanwhile, Perplexity AI has revised its merger offer to ByteDance, proposing a new entity that combines Perplexity and TikTok US. Under the revised plan, the US government would own 50% through a future IPO.

• As cyberattacks rise, cybersecurity DD is no longer optional in M&A. Buyers are diving deep to assess a target’s security practices—vulnerabilities, past breaches, and hidden threats. Targets that prep in advance—documenting past incidents, closing security gaps, and clarifying compliance measures—can avoid deal disruptions and protect deal value.

• Last Friday, there were rumours that Diageo, the owner of the beloved Irish beer Guinness, was considering selling the iconic beer brand—valued at over $10bn. But Diageo quickly squashed those talks, clarifying there are no plans to sell.

SECTOR SPECIFIC

Emirates’ Chinese future

🚜 DIGGERS

• Global mining heavyweights Rio Tinto and BHP are flirting with mega-mergers. The driver? Copper. Rio reportedly held merger talks with Glencore late last year, while whispers continue about BHP reviving its bid for Anglo American after a $75bn rejection in 2024. With Australia’s aging iron ore deposits delivering lower grades and prices sliding, Rio and BHP are hunting for copper-rich deals.

• Australia's rising dependence on foreign-made solar systems—especially from China—raises cybersecurity alarms, with solar inverters and batteries often linked to the internet. In response, the Australian Energy Market Operator (AEMO) has been granted new powers to safeguard the energy grid against cyberattacks.

• WA government has decided to hike the Exploration Incentive Scheme to $18m (up from $9m) - a major win for exploration companies.

🏦 FIN

• Cbus, the construction sector super fund, is riding high after its managed retirement savings topped $100bn, despite a “blip” in November and December when APRA and ASIC both alleged serious governance failures.

• Backed by Tanarra Capital since 2021, Health Metrics, a SaaS player in aged care and disability services, is up for grabs. The platform pulls in $50m annually. Analysts tip a $300–$400m price tag, with private equity and healthcare software heavyweights circling.

🏡 RETAIL & REAL ESTATE

• Emirates' CEO drops hints about adding Chinese-made aircraft to its fleet. While acknowledging the hurdles for these planes to gain commercial approval in the West, he sees them becoming viable by the mid-2030s.

• What’s up for grabs if the Star collapses? New York fund Blackstone is reportedly eyeing Star’s Sydney-based slot machines, lobbying the NSW government to secure those machines for Crown’s Barangaroo casino floor.

• The Walt Disney Company reported a 22% drop in its Australian profits, impacted by the 2023 Hollywood strikes as well as a delayed release schedule that pushed blockbusters like Inside Out 2 and Deadpool & Wolverine to the second half of the year.

📱 TECH

• Tesla is suing the EU over anti-subsidy tariffs slapped on Chinese-made EVs in October. With tariffs of 7.8% on its Model 3s and up to 35.3% on other brands, Tesla joins BMW and Chinese giants like BYD and Geely in the fight.

• Mark Zuckerberg says Meta will pump up to US$65bn into AI in ‘25—think massive new data centres and beefed-up AI teams.

• Google is committing $120m to AI education, aiming to familiarise workers and governments with AI and using AI tools, with the hope that AI education will make for better AI policy.

• While Bezos roots for Trump, Amazon Australia inks a power purchase agreement with Global Power Generation to buy 100% of the electricity from a Victorian wind farm to help “slow the speed of climate change”.

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