Despite announcing the appointment of new director and future chairman Nick Falloon in March, Fairfax has yet to put him on the board and has yet to obtain regulatory approval for his appointment from the media regulator.
Fairfax announced that media industry veteran Falloon would join the board on March 26, confirming the former Ten chairman would succeed Roger Corbett as chairman in August just five months after his appointment. But his brief period on the board before taking on the chairmanship will be even shorter than it first appeared, as the company hasn’t yet obtained ACMA approval for him to breach the media concentration rules temporarily following the Macquarie Radio-Fairfax merger.
Media concentration rules prohibit a single entity from controlling more than two radio licences in an area. The merger resulted in the new Macquarie-Fairfax entity controlling more than two licences in several markets, requiring the new company to divest itself of the necessary licences to return to compliance with the ownership rules. As part of the ownership rules, companies and their directors are given a grace period in which to undertake divestment, via a temporary breach approval process.
The new entity obtained an approval for directors of Fairfax and Macquarie on February 3, ahead of the transaction date of March 31. But although his appointment was announced several days before the transaction was completed, Falloon doesn’t appear on the list, and thus would be breaking the law the moment he joined the Fairfax board and was in a position to control more than two radio licences.
That’s why the appointment of Falloon was announced on March 26 but a month and three days later, he still isn’t listed as a director on either Fairfax’s corporate website or on the ASX (screenshot from ASX website below).
“The appointment was effective subject to regulatory requirements which we expect will come through in the next few days,” a Fairfax Media spokesman told Crikey — meaning Falloon is still unable to commence his duties as director. ACMA, which needs to issue the temporary breach approval, said it was “unable to comment”.
While Falloon hasn’t yet missed a board meeting — there’ve been none since his appointment and the next one is in late May — it’s an embarrassing administrative blunder that the company is still waiting for its high-profile incoming chairman to be given the tick by the regulator on something that was sorted out for his fellow directors months ago.