HOTCOPPER is Australia’s largest stockmarket chat room. Its managing director, Greg D’Arcy, told us this week he was getting ready to move to another country, probably the US, due to the relentless pressure from lawyers.
”There is no freedom of speech in Australia,” said D’Arcy. You can speak freely about politicians, but when it comes to business, no such luck.
HotCopper has 170,000 members. On average, it receives 6000 blog posts a day. It has 10 volunteer moderators catching 50 defamatory posts a day.
And it cops, on average, two legal threats a week. It was three this week, said D’Arcy, including one from Excalibur Mining and one from Samson Oil.
The worst thing, he reckons, is that companies are using their shareholders’ money to shut down debate.
In the case of Empire Oil & Gas, where he was forced to remove the entire history, 60,000 posts, the company is raising money from its shareholders at the same time as threatening to sue them for defamation. More on that later.
D’Arcy already has his servers and the HotCopper database offshore.
”I employ people here, I pay tax here, ASIC has logins, but I really don’t have a choice”.
IT’S a peculiar situation. This writer is subject to regular tirades on HotCopper, slandered with all sorts of nasty epithets and nefarious claims. We last unleashed the fury of the chat forum’s faithful back in March, in the wake of a story on Energy World Corp, which preceded a halving in the share price.
Market manipulation, they cried. Attacking a stock for personal gain! Abusing his role as a reporter! There has been worse.
As if a newspaper report, untrue or unfair, could do lasting damage to a share price or a reputation, anyway.
On a more critical note, Australia’s preposterous defamation laws, the strictest in the world and based on a 100-year-old British statute, are now more arcane than ever, with the advent of new media. The internet is global and instantaneous.
Yet websites are being shut down and censored at an alarming rate. There are few resources in new media to stop corporations suppressing their critics. And this at a time when mainstream media budgets are under severe pressure. You can see where things are headed. If free speech is not protected and the influence of vested interests over government stays on the creep, it will not be merely shareholder democracy under threat.
At least in the US, whose Washington plutocracy is held in the sway of Wall Street donations, freedom of speech remains firmly enshrined in the constitution.
THERE is no more striking example of the threat to shareholder democracy than the bitter stoush engulfing Empire Oil & Gas, where long-suffering shareholders have been trying to toss out the board.
On August 17, the West Australian Supreme Court made orders that HotCopper release the IP addresses and locations of those who had put up posts on the Empire Oil & Gas discussion thread. Effectively, HotCopper was compelled to release the identities of 53 of its members, including an 85-year-old grandmother.
A letter arrived from Perth lawyer Martin Bennett a few days later demanding all posts be removed from the EGO thread. HotCopper duly removed the entire discussion. Empire’s lawyer, Bennett also wrote to the 377 shareholders who had committed their shareholdings in support of the requisition to roll the board.
The company intended to apply to the Supreme Court, said Bennett, for an order that ”representative defendants” be appointed on behalf of the 377 signatories. It was all part of the push to claim their notices were invalid. He also warned that any court orders would be binding on all signatories.
There was an alternative, though. Shareholders could appoint their own legal representatives to argue that their forms were valid. Naturally, they would have to pay their own costs.
Support for the requisition quickly evaporated, with 195 shareholders withdrawing, leaving 165 behind wondering if they might be up for court costs.
Two defamation writs were also issued: one to shareholder Darren Watson, the other to a 67-year-old nurse from Queensland, Susanne Devereux. Though gagged on HotCopper and hit with defamation writs, Devereux and Watson still found themselves subject to abuse in social media and on a website supporting the Empire board and management.
”When I clicked, my own personal Facebook page with family contents came up and I was absolutely shocked,” Devereux said yesterday. ”I have now closed down my personal website because I did not want these people harassing my family.”
Empire’s dissidents, led by shareholder Eddie Smith, say the company is using the defamation laws as a tactic, bullying shareholders into backing away from their tilt at the board.
Smith has also been threatened with defamation by individual Empire board members.
Unless there is reform, and it appears nobody in Canberra seems to be listening, Australia’s defamation laws will continue to be used as a commercial tactic.
Shutting down a nasty post is one thing – and HotCopper’s Greg D’Arcy has no problem with that – but stifling debate over a company’s management and direction, that’s another thing entirely.