Xero defends CEO pay

PRACTICE POINTS

Is AI washing the new greenwashing?

• Greenwashing, social washing, and now AI washing are on the regulator’s radar. AI washing is the practice of misstating your organisation or product's AI capability. And regulators in the US and Europe are already onto it. The US SEC brought cases against investment advisers for their statements regarding AI, marking the first AI washing action in the US. Meanwhile, the EU's new AI Act includes strict requirements to protect consumers from deceptive AI use: MinterEllison

• With wage theft now a criminal offence under the Fair Work Act, the Court is taking a hard stance against employers. The Federal Court slapped Sushi Bay with $15.3m penalty for underpaying 163 employees, mostly Korean nationals, $650k. The penalty was split - $13.7m for the company and the sole director copped a personal fine of $1.6m. The deliberate and systematic nature of the underpayment elevated the breaches to "serious contraventions", with the Court noting the need to send a strong signal to employers.

• The WA Supreme Court has further clarified legal professional privilege. In a dispute between a MinRes subsidiary and a drilling manufacture over a drilling incident, the Court considered documents discovered that were created by the in-house counsel team for an investigation into the incident but were objected to on LPP grounds. The Court held that while the subjective purpose of the investigation was to assist the plaintiff in obtaining legal advice, the documents were used for other purposes, including informing the Board and the company’s insurer of the incident. The plaintiff failed to “call seemingly available evidence” that could have established the dominant purpose of the documents in questions was for obtaining legal advice.

WORD ON THE STREET

RSM slams Big Four culture

• While rivals like BDO are snapping up ex-Big Four partners, RSM is steering clear—saying the cutthroat culture at the Big Four could undermine its team-first ethos. Since 2020, it’s only admitted 11 Big Four alumni, preferring home-grown talent to supercharge its growth: AFR

• Maurice Blackburn seals pay deal after fiery lawyer standoff. Staff earning under $100k will get a 12.5% pay rise over 3 years, and the firm has agreed to 6 days of paid reproductive leave. One of only two major law firms that encourage union membership, Maurice Blackburn says the deal goes beyond inflation and private sector wage growth: Lawyerly

• More AI agents incoming. Freshfields is teaming up with Google to roll out Gemini AI and Google Workspace across its offices, including Docs, Sheets, and NotebookLM. The firm will also use Google's enterprise AI platform, Vertex AI to create bespoke AI agents as part of its client-centric innovation strat: PR Newswire

TALKING POINTS

China’s fight to the end

• Beijing has hit US goods with an 84% tariff, up from 34%, after Trump’s 104% levy on Chinese goods kicked in. US officials have called the hike “unfortunate”. China’s also announced trade restrictions against 18 US companies, mostly defence: ABC News

• In response, President Trump announced a 90-day pause on higher tariffs affecting multiple trade partners, except for Beijing. Trump slapped a 125% tariff on China “effective immediately”. The move led to a 9.5% surge in the S&P 500, marking the biggest one-day gain since the global financial crisis: Bloomberg

• High Court ruling a breakthrough for church abuse survivors. The court has ruled that survivors like ‘DZY’—abused by two Catholic brothers in the 1960s—can challenge past settlements, even if they weren’t forced into them by two common obstacles, the Ellis defence or limitation periods. Lawyers say the decision paves the way for more survivors to revisit “inadequate” payouts: The Guardian

TREASURY

DEAL ROOM

IPO exodus

• It’s dire times in the US IPO market. AI-driven energy startup 1Komma5 Grad joining Sweden’s Klarna in shelving US listing plans. The $1bn German unicorn cited "market reaction" and policy uncertainty. Even stock exchange operator Euronext says the US is looking more like an emerging market than a developed one right now. Ouch: Reuters

• More Gold Road-Gold Fields beef. Gold Road has retracted key claims about the underground potential at Gruyere, pulling cost estimates and mine data after Gold Fields raised concerns with the ASX. The company warned investors to “place no reliance” on the info—a day after using it to talk up its value amid a $3.3bn takeover fight with its JV partner. Bit awks: The Australian

• Galan Lithium’s quietly mandated Petra Capital to test demand for a $35m raise, hot on the heels of rejecting a $252m bid from Huayou and Renault for its Argentinian lithium assets. With just $3.6m in the bank, it’s hoping to stay independent long enough to ramp up its Hombre Muerto West project: AFR

• In other raising news, Chris Ellison’s MinRes is back in the spotlight over rumours that it's revived efforts to sell its Wodgina lithium operation and tested waters for a $3bn equity raise. The company denies both. But with $5bn in net debt, investors are watching closely: The Australian

SECTOR SPECIFIC

The $25m CEO

🚜 DIGGERS

• Northern Star cops $750k fine after a jumbo drill incident left a worker with serious spinal and leg injuries at its Carosue Dam mine. WA’s regulator said key safety protocols were ignored, with failures in supervision and hazard control. The ASX gold giant pleaded guilty to the breaches: The Australian

• Rio Tinto is hopeful that President Trump will fast-track final approvals for its Resolution Copper Project in Arizona, a joint venture with BHP. Despite opposition from Native American groups, the project could supply over a quarter of the US' copper demand. The project is part of Rio’s strategy to drive its copper portfolio, with Oyu Tolgoi and La Granja also key assets: Mining.com

🏦 FIN

• The US Deputy AG Todd Blanche has disbanded the Justice Department’s crypto enforcement team, slamming the Biden-era “regulation by prosecution” as “ill-conceived”. Under Trump’s new crypto-friendly stance, the DOJ will not target crypto exchanges or offline wallet providers. Prosecutors must shut down investigations that don’t align with the policy shift: Finextra

• Aussie financial regulators said a period of uncertainty would likely persist for some time. But the financial council, chaired by the RBA Governor Michele Bullock, reassured that the financial system remains strong and committed to continued monitoring. Market speculation of significant interest rate cuts by the RBA continues to circle: Bloomberg

🏡 RETAIL & REAL ESTATE

• Lendlease’s institutional clients are seeking legal advice on shifting their funds due to Lendlease's poor performance and retreat from global markets. Vicinity, GPT, Mirvac and Charter Hall are circling, ready to take on the funds. With its share price down 20% compared to a year ago, the pressure is on: The Australian

• Knight Frank has releases its latest report on Global Data Centres. Australia’s data centre market has gained momentum, with Melbourne emerging as a key AI-driven hub due to Sydney’s land scarcity. AI workloads require significantly more power, almost doubling rack densities to 80kW. The global market is set to grow 18% annually, reaching US$4tn by 2030. Transaction volumes surged 118% to US$31.8bn, while average transaction values rose 15% to US$75.4m: COMO 

📱 TECH & START UP

• Xero defends $25m CEO pay for US-based boss Sukhinder Singh Cassidy, the second best paid CEO on the ASX after Macquarie. The board says her package aligns with US tech peers, but the big pay packet is raising eyebrows because Xero makes most of its money in Aus. Rem report strike incoming? Capital Brief

• Atlassian has dismissed concerns that AI could make its engineers redundant. The $55bn tech giant thinks AI will increase demand for engineers, not reduce it, despite AI's growing role in code generation. The company’s Rovo AI assistant is now free for Jira and Confluence subscribers, reverting to its product-led marketing approach: Capital Brief