THE Federal Government has drafted laws to crack down on corporate shysters who trick investors into selling their shares below market price.
The draft bill would let companies refuse to hand over share registers if someone seeks that information for improper purposes.
It would also make it an offence to make a false and misleading application for a register.
Under existing law, a company is required to give a copy of its share register to anyone who asks for it, charging them a small fee.
Corporate Law Minister Chris Bowen said the Government was acting to put unscrupulous operators out of business.
Genuine takeover bids would be exempt from the proposal to limit access to share registers.
"This legislation is designed to balance the needs of those seeking legitimate access to registers with the rights of those whose personal information is contained in the register,'' Mr Bowen said.
The Government plans to introduce the Corporations Amendment (No.1) Bill 2010 into the lower house of parliament in coming weeks.
The proposals in the bill were contained in a discussion paper, released in February.
The Government is targeting controversial entrepreneurs, like David Tweed, who profit by convincing naive shareholders to sell him their shares below market price.
Tweed's business is based on accessing a company's share register and using that information to send out low-value share offers.
