Treasury officials told The Australian Financial Review the power will be used sparingly and not for individual cases but to protect against unforeseen circumstances and ensure proper operation of markets, rather than advance any reform.

The power is yet to be used, but for the type of immediate action envisioned, officials pointed to the moratorium on insolvent trading laws and the Australian Securities and Investments Commission's "no action" guidance on annual general meetings. However, the officials did not rule out broader changes, including on class actions and disclosure.

There is also a push by legal lobby groups for Mr Frydenberg to use the power to allow companies to go fully virtual on AGMs, annual reports and other administrative requirements.

Jennifer Westacott, chief executive of the Business Council of Australia, is pushing the Treasurer on changes to disclosure laws. Alex Ellinghausen

The BCA raised the issue of disclosure during an earlier conference call with members on Thursday, after leading companies raised their concerns that disclosures related to COVID-19 could trigger class actions.

More than 100 ASX-listed companies have withdrawn their forecast guidance, including AMP, BlueScope, Mirvac and Bank of Queensland.

A legal land grab?

The BCA is in discussions with Treasury and seeking a defence for any breach of directors’ duties for actions made in relation to COVID-19 "in good faith", as well as a freeze on class actions so that only ASIC is granted the ability to take action against companies.


The business group claims its push is more targeted and politically palatable than the campaign by the Australian Institute of Company Directors, which called for blanket protections on directors duties because companies and boards would still be exposed for misleading statements.

However, insiders said the push for a freeze on class actions may also be a step too far for the Treasurer to take.

The AICD campaign, which was backed by AMP chairman David Murray and Wesfarmers chairman Michael Chaney and reported by the Financial Review, sparked a backlash from investor groups.

The local head of proxy firm CGI Glass Lewis, Dan Smith, described the push as a legal land grab, while the Australian Council of Superannuation Investors was also deeply opposed and said new ASX guidance went far enough.

“Continuous disclosure provisions are fundamental to market integrity and should not be diminished, even on a temporary basis," CEO Louise Davidson said.

King & Wood Mallesons partner Will Heath, who has been working with the BCA on the proposal, said while the ASX guidance had been helpful, it did not change the strict liability that companies and boards face in regard to disclosing material, price-sensitive information.

"The ASX guidance was helpful because it said you do not have to provide forward-looking statements, but it doesn't change continuous disclosure obligations, which means unless you remain silent, you are exposed to class actions and legal liability", he said.

"That does not mean silence is golden in the sense you still need to disclose price-sensitive, material information like capital raisings and bank covenant breaches to the market".