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Australia extends relaxation of company reporting rules amid coronavirus pandemic
[SYDNEY] Australia extended by six months its temporary relaxation of company disclosure obligations, including allowing businesses to avoid releasing earnings forecasts in a bid to shield them against lawsuits during the coronavirus pandemic.
The government in May amended corporate laws to protect companies and their officers so they can only be held legally liable for market statements if there had been "knowledge, recklessness or negligence".
"Given the impact of Covid-19 and the uncertainty it generates, it remains considerably more challenging for companies to release reliable forward-looking guidance to the market," Federal Treasurer Josh Frydenberg said on Wednesday.
Frydenberg said uncertainties due to Covid-19 had exposed companies to "the threat of opportunistic class actions" for alleged failures on disclosure obligations if their forecasts in the middle of a pandemic were found to be inaccurate.
These temporary changes will now run until March 23, 2021.
Australia has provided regulatory relief for businesses during the Covid-19 crisis. Earlier this month, the government extended the temporary insolvency and bankruptcy protection rules until the end of this year.
Australia has avoided the high rate of virus deaths seen in other developed countries thanks to strict restrictions, but the pandemic has still wreaked havoc on the economy.
To cushion the blow, Australia has rolled out stimulus packages worth about A$314 billion (S$307.3 billion).