The existence of the 'specified purpose' under s 411(17) — enabling avoidance of ch 6 provisions — remains a relevant factor in the court's discretion under s 411(4)(b) even where ASIC has provided a statement of non-objection under s 411(17)(b). The specified purpose is the subjective purpose of the proposers and those associated with proposing the arrangement; it need not be the dominant purpose but must be significant or substantial. Where ASIC has provided a statement, there is no onus on the applicant to prove the absence of the specified purpose on the balance of probabilities. Scheme proponents should adduce direct evidence of purpose from the guiding minds of the proposing entities rather than relying solely on structural features of the arrangement. Scheme booklets should warn shareholders with encumbered shares about the potential consequences of deemed warranty clauses and the transfer of shares on their borrowing arrangements.
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