Dated at Auckland this 21st day of August 2012.
The Common Seal of the Takeovers Panel was affixed in the presence of:
D M Flacks,
Statement of reasons
Note: The following statement of reasons should be read in conjunction with the statement(s) of reasons appended to the:
This notice applies to acts or omissions occurring on or after 21 August 2012.
The Takeovers Panel (the Panel) has granted a class exemption from rule 6(1) of the Takeovers Code (the Code) for persons who are or who become trustees of a private family trust (family trust). The exemption is available for persons who increase their voting control in a code company as a result of changes to the trust's trustees (changes to trustees).
The relevant changes to trustees relate to the appointment of a new trustee or the reduction in the number of trustees of the family trust where there is no increase in voting control in a code company on behalf of the trust resulting from the changes to trustees.
The exemption relates to a bona fide reorganisation of the family trust or an event outside the control of the trustees of the trust.
The conditions of exemption are designed to ensure that the underlying purpose and intent of the Code is fulfilled. Accordingly, the conditions of exemption require that—
the family trust is established and remains mainly for the benefit of the settlor or appointers, their relatives, or persons for which they have natural love and affection; and
under the trust deed, the trustees must act unanimously; and
the changes to trustees must be a bona fide reorganisation of the family trust or be the result of an event beyond the control of the trustees; and
there is no collateral purpose of enabling the trustees to increase voting control in a code company otherwise than in compliance with the Code; and
the changes to trustees involve no increase in the trustees' voting control in the code company.
The Panel considers that it is appropriate and consistent with the objectives of the Code to grant the exemption because—
the exemption only applies where the appointment of a new trustee or a reduction of the number of trustees relates to a reorganisation of the family trust, or an event outside the control of the trustees, and the Code is not intended to inhibit restructuring of family trusts that has no real effect on the shareholders of a code company; and
in the case of a trustee exiting the trust, although the reduction in the number of trustees will result in the continuing trustees each being deemed to increase their holding or controlling of voting rights in a code company, the Code is not intended to regulate these changes to the trustees of family trusts; and
in the case of a person being appointed as a trustee, there would be no disadvantage to the shareholders of a code company in not having the opportunity to vote on a trustee's appointment as trustee of the trust, as it would not have any real effect on those shareholders; and
the exemption avoids unnecessary compliance costs that would be incurred if it were not granted.
Note: The preceding statement of reasons should be read in conjunction with the statement(s) of reasons appended to the: