Dated at Christchurch this 20th day of December 2005.
The Common Seal of the Takeovers Panel was affixed in the presence of:
Statement of reasons
This notice applies to acts or omissions occurring on or after 25 November 2005.
The Takeovers Panel (the Panel) has granted exemptions in respect of rule 6(1) of the Takeovers Code (the Code) to—
•Anthony Edwin Falkenstein and Ian Donald Malcolm as trustees of The Edwin Trust (The Edwin Trust), Heather Jeanette Falkenstein and Ian Donald Malcolm as trustees of The Jeanette Trust (The Jeanette Trust), and Yada Holdings No. 1 Limited as trustee of the Leonard Trust (the Leonard Trust) (together the Falkenstein Trusts):
•Ian Donald Malcolm, Pamela Joy Malcolm, and Barbara Kay Astill as trustees of the Malcolm Education and Lifestyle Trust (the Malcolm Trust):
•The Harvard Group Limited (Harvard).
The exemptions granted relate to shareholders who increased their control percentage in Just Water International Limited (Just Water) through the following transactions (the reorganisation transactions) that took place on or around 25 November 2005, as part of the reorganisation of Falkenstein family interests:
•Harvard was incorporated on 21 October 2005 and shares in Harvard were transferred on that date to the trustees of The Edwin Trust (as to 38%), the trustees of The Jeanette Trust (as to 38%), the trustee of the Leonard Trust (as to 19%), and the trustees of the Malcolm Trust (as to 5%):
•Oldrec Limited (in liquidation) distributed legal ownership of—
•17 268 000 shares in Just Water to the trustees of The Edwin Trust:
•17 268 000 shares in Just Water to the trustees of The Jeanette Trust:
•8 634 000 shares in Just Water to the trustee of the Leonard Trust:
•the trustees of The Edwin Trust transferred 16 000 000 shares in Just Water to Harvard:
•the trustees of The Jeanette Trust transferred 16 000 000 shares in Just Water to Harvard:
•the trustee of the Leonard Trust transferred 8 000 000 shares in Just Water to Harvard:
•the shareholders of Harvard acted jointly or in concert to acquire their shareholdings in Harvard, and also to procure Harvard's acquisition of 40 000 000 Just Water shares from the trustees of the Falkenstein trusts. Therefore, all of the trustees of the Falkenstein Trusts and the trustees of the Malcolm Trust (in other words, all of the shareholders of Harvard) were deemed to become the controllers, together, of Harvard's 60.21% holding of Just Water shares.
In each case, compliance with the Code was overlooked.
The Panel is satisfied that these breaches of the Code were inadvertent.
It is a condition of the exemption granted to the shareholders of Harvard that the trustees of the Malcolm Trust have divested their 5% shareholding in Harvard by the expiry of 7 days from the date of this notice. This condition promptly restores control of voting rights in the Just Water shares that are the subject of the reorganisation transactions, to 100% effective control by the trustees of the Falkenstein Trusts following the divestment.
The Panel considers that the granting of the exemptions is appropriate and consistent with the objectives of the Code because—
•although the reorganisation transactions resulted in an indirect change in the form of control of Just Water, the condition imposed will restore the effective control of voting rights in Just Water to the position prior to the reorganisation transactions; and
•shareholders of Just Water were not disadvantaged in not having the opportunity to vote on the reorganisation transactions at a meeting of shareholders, as those transactions (following the divestment by the trustees of the Malcolm Trust of their 5% shareholding in Harvard) had no real effect on those shareholders; and
•the breaches of the Code were inadvertent.