There is hereby established a Corporation to be called the Development Finance Corporation of New Zealand.

The general conduct of the business of the Corporation shall be entrusted to a Board of Directors, constituted in accordance with Part II of this Act.

The Head Office of the Corporation shall be in Wellington, and the Corporation may establish such branches as the Board thinks fit.

The original capital of the Corporation shall be two million pounds, in shares of ten shillings each, which shall be offered by the Board at par for public subscription or otherwise in New Zealand and shall be allotted by the Board in such amounts and on such terms and conditions as to payment as the Board determines:

Provided that the Board shall from time to time offer to the Reserve Bank such number of shares as will ensure that the Reserve Bank, if it accepts the offer, will hold thirty per cent of the share capital for the time being of the Corporation.

The Board may from time to time by resolution recommend to the Minister that the share capital of the Corporation be increased and in any such case the Governor-General, on the recommendation of the Minister, may by Order in Council increase the share capital of the Corporation to such amount as may be prescribed in the Order.

The share capital of the Corporation shall not be increased otherwise than in accordance with subsection (2) of this section.

The liability of every shareholder shall be limited to the amount (if any) for the time being unpaid on the shares held by him.

After the amount of one million pounds of the capital of the Corporation has been subscribed, the Minister shall give public notice of the subscription in the Gazette and in such other manner as he thinks fit, and on a date to be specified by the Minister by the notice in the Gazette the shareholders of the Corporation shall become a body corporate, with perpetual succession and a common seal, and shall be capable of holding real and personal property, of suing and being sued, and of doing and suffering all such other acts and things as bodies corporate may lawfully do and suffer.

The general functions of the Corporation shall be to provide finance for the establishment of new industries in New Zealand or for the development or extension of any industry for the time being carried on in New Zealand in cases where finance is not available on reasonable terms and conditions for any such purpose and to encourage and promote investment in the industrial development of New Zealand by providing technical assistance and advice.

Without limiting the generality of subsection (1) of this section, the Corporation shall have the following particular functions:

In the exercise of its functions the Corporation shall,—

The Corporation shall have all such powers, rights, and authorities as may reasonably be necessary or expedient to carry out its functions, and in particular it may from time to time do all or any of the following things—

In the exercise of its powers the Corporation shall ordinarily provide financial assistance for industrial projects only when the Board is satisfied that any such assistance is not otherwise reasonably available, and in no case shall the Corporation provide the whole of the finance for any project.

The Corporation shall not provide financial assistance to any body the capital of which is wholly supplied by the New Zealand Government or to any local authority

Subject to the provisions of this Act, there shall be a Board of Directors of the Corporation consisting of—

The first directors under paragraph (d) of subsection (1) of this section shall consist of six persons appointed by the Minister from a panel nominated by those persons whom the Minister is satisfied will subscribe for shares in the capital of the Corporation.

The directors appointed under subsection (2) of this section shall hold office until their successors are elected in accordance with this Act, and shall then retire from office.

Subject to the provisions of this Act, the elected directors shall be elected for a term of three years by the shareholders at a general meeting of the Corporation but may from time to time be re-elected.

A general meeting shall be held for the purpose of electing directors as soon as practicable after the date of the incorporation of the Corporation.

Notwithstanding anything to the contrary in this Act, every elected director, unless he sooner vacates his office under section 12 of this Act, shall continue in office until his successor comes into office.

With respect to the first elected directors, the following provisions shall apply:

Any elected director may at any time be removed from office by the Board, in accordance with its rules, for disability, insolvency, neglect of duty, or misconduct proved to the satisfaction of the Board, or may at any time resign his office by writing addressed to the Chairman of the Board.

If any elected director dies, or resigns, or is removed from office, his office shall become vacant and the vacancy shall be deemed an extraordinary vacancy.

An extraordinary vacancy shall be filled in the manner in which the election to the vacant office was originally made.

Every person elected to fill an extraordinary vacancy shall be elected for the residue of the term for which the vacating member was elected.

The powers of the Board shall not be affected by any vacancy in the membership thereof.

If any elected director is incapacitated by illness, absence, or other sufficient cause from performing the duties of his office, that director may appoint a deputy, approved by the Board in that behalf, to act for him during his incapacity.

Any deputy appointed under this section shall, while he acts as such, be deemed to be a director of the Corporation.

No appointment of a deputy and no acts done by him as such, and no act done by the Board while any deputy is acting as such, shall in any proceedings be questioned on the ground that the occasion of his appointment had not arisen or has ceased.

The Board shall from time to time elect one of its number to be Chairman of the Board and another to be Deputy Chairman to hold office, in each case, for such term as the Board determines:

Provided that neither the Chairman nor the Deputy Chairman shall hold office as such at any time when he is not a director.

During any vacancy in the office of Chairman, or in the absence of the Chairman from any meeting of the Board, or in the event of the Chairman being incapacitated by illness or other cause from performing the duties of his office, the Deputy Chairman shall have and may exercise all the powers of the Chairman.

The first meeting of the Board shall be held on a day to be appointed in that behalf by the Minister.

Subsequent meetings of the Board shall be held at such times and places as the Board or the Chairman from time to time appoints.

The Chairman of the Board may at any time call a special meeting of the Board and the Chairman shall call a special meeting whenever requested to do so in writing by any three directors.

At all meetings of the Board not less than half the directors (including at least one non-elected member) shall form a quorum.

The Chairman shall preside at all meetings of the Board at which he is present. In the absence from any meeting of the Chairman and the Deputy Chairman, the directors present shall appoint one of their number to be Chairman at that meeting.

In the absence from any meeting of the Board of any director (other than an elected director), any officer of the Reserve Bank or, as the case may require, of the Department of the absent director, authorised in that behalf may attend the meeting in his stead, or during intervals between meetings do any act which the director may do, and while so attending or acting shall be deemed to be a director.

At any meeting of the Board the chairman shall have a deliberative vote, and, in the case of an equality of votes, shall also have a casting vote.

All questions arising at any meeting of the Board shall be decided by a majority of the valid votes recorded thereon.

Subject to the provisions of this Act and of the rules of the Corporation, the Board may regulate its procedure in such manner as it thinks fit.

The Board may from time to time, by resolution, appoint, discharge, alter, continue, or reconstitute committees consisting of such directors as may be resolved in that behalf.

The Board may delegate to any committee appointed under this section such of its powers as it thinks fit.

Subject to any general or special directions given or conditions attached by the Board, any powers so delegated may be exercised by the committee with the same effect as if those powers had been directly conferred by this Act and not by delegation.

Every committee purporting to act under any delegation under this section shall be presumed to be acting in accordance with the terms of the delegation, in the absence of proof to the contrary.

Every such delegation shall be revocable at will, and no such delegation shall prevent the performance or exercise of any power by the Board.

Until any such delegation is revoked, it shall continue in force according to its tenor, notwithstanding any change in the membership of the Board or of any committee.

Subject to the rules of the Corporation, each committee may regulate its own proceedings in such manner as it thinks fit.

The Corporation may from time to time borrow money in New Zealand or elsewhere and issue debentures and mortgage or charge any of it real or personal property:

Provided that if the repayment of any amount borrowed by the Corporation is guaranteed by the Minister of Finance under this Act, the loan shall be subject to such terms and conditions as the Minister of Finance thinks fit.

The total amount borrowed under this section together with any contingent liabilities of the Corporation by way of guarantee or indemnity shall not at any time exceed an amount equal to five times the authorised capital for the time being of the Corporation:

Provided that in calculating the total indebtedness of the Corporation for the purposes of this subsection, no account shall be taken of any contingent liability in respect of which the Minister of Finance has given a guarantee under this Act to the Corporation.

Subject to the provisions of this Act, the Minister of Finance may from time to time, on behalf of Her Majesty the Queen—

on or subject to such terms and conditions as that Minister thinks fit.

All money required to be paid by the Minister of Finance under this section shall, without further appropriation than this section, be paid out of the Consolidated Revenue Account or out of the National Development Loans Account. Where any payment under this section is made out of the National Development Loans Account, the authority of the Minister to borrow money under section 11 of the New Zealand Loans Act 1953 shall be deemed to be extended as if the money so paid had been transferred from the National Development Loans Account to another fund or account as mentioned in that section.

The Minister of Finance may from time to time, on behalf of Her Majesty the Queen, enter into agreements with the Corporation for the purpose of giving full effect to the provisions of this section.

In the exercise of his powers under this section, the Minister of Finance may from time to time advance to the Corporation on the security of debentures issued by the Corporation an amount not exceeding in the aggregate two million pounds. Any such advance shall be free of interest and shall not be repayable until the date when the amount in the Reserve Fund first reaches five hundred thousand pounds or the date ten years after the time when the advance was made, whichever date is the earlier. From that date any such advance shall be subject to such terms and conditions as to repayment and payment of interest as the Minister of Finance may determine after consultation with the Board.

Notwithstanding the provisions of any enactment or rule of law, all other debentures issued by the Corporation, whenever issued, shall have priority as to repayment over any debentures issued by the Corporation for the purpose of securing a loan under subsection (4) of this section.

In any case where the Corporation borrows any money, whether by the issue of debentures or by way of overdraft or otherwise, the Minister of Finance may give such guarantees as he thinks fit in respect of the amounts borrowed by the Corporation:

Provided that no such guarantee shall be given if the total amount borrowed by the Corporation in respect of which any such guarantees are for the time being in force is in excess of three times the authorised capital for the time being of the Corporation.

All bonds, debentures, and other securities issued by the Corporation shall, for the purposes of section 4 of the Trustee Act, be investments in which a trustee may invest trust funds if payment of all money secured by any such securities is guaranteed by the Government of New Zealand.

The Corporation shall establish a Reserve Fund into which shall be paid the annual surplus of the Corporation.

The annual surplus shall consist of so much of the annual income of the Corporation as is not required for the payment of expenses, provision for bad and doubtful debts, depreciation of assets, and all such other matters as the Board considers proper.

During the first two years after the date of the incorporation of the Corporation the whole of the annual surplus of the Corporation shall be paid into the Reserve Fund.

During subsequent years provision may be made for the payment by the Corporation of a dividend of such amount as the Board thinks fit:

Provided that if at the end of any financial year to which this subsection relates the amount in the Reserve Fund is less than five hundred thousand pounds, not less than twenty-five per cent of the annual surplus shall be paid to the Reserve Fund and no dividend in excess of six per cent of the paid up share capital for the time being shall be paid in respect of that year:

Provided also that if at the end of any such financial year the Corporation is indebted to the Minister of Finance in respect of any interest-free loan under subsection (4) of section 18 of this Act or receives any taxation concessions under subsection (1) of section 22 of this Act, the Governor-General may by Order in Council declare that the provisions of the foregoing proviso, with such variations or modifications (if any) as may be prescribed in the Order, shall continue to have effect, and every such Order in Council shall have effect according to its tenor.

Any amount in the Reserve Fund may from time to time be invested by the Corporation in such manner as the Corporation is authorised to invest its capital or other funds belonging to the Corporation.

The Corporation shall be exempt from the payment of land tax and income tax until the end of the financial year after the date when the amount in the Reserve Fund first reaches five hundred thousand pounds or the date ten years after the incorporation of the Corporation, whichever date is the earlier.

The Corporation shall be deemed to be a development project within the meaning of section 86a of the Land and Income Tax Act 1954.

The Corporation may pay to the elected directors such remuneration by way of fees or otherwise as the Board from time to time determines:

Provided that during such time as the Corporation is indebted to the Minister of Finance in respect of any interest-free loan under subsection (4) of section 18 of this Act or receives taxation concessions under subsection (1) of section 22 of this Act, the total amount paid to directors under this subsection shall not exceed five thousand pounds in any year.

There shall be paid from the funds of the Corporation to the elected directors of the Board travelling allowances and expenses in accordance with the Fees and Travelling Allowances Act 1951, and the provisions of that Act shall apply accordingly as if the directors were members of a Statutory Board within the meaning of that Act.

As soon as reasonably practicable after the end of each financial year the Board shall prepare a balance sheet and such other statements of account as are necessary to show fully the financial position of the Corporation and the financial results of its operations during that year together with a report of its operations for the year.

A copy of the report, and accounts and balance sheet certified by the auditors of the Corporation, shall be forwarded to the Minister and laid by him before Parliament if then sitting, and, if not, within twenty-eight days after the commencement of the next ensuing session.

The accounts of the Corporation shall be audited in the same manner as if the Corporation were a public company under the Companies Act 1955.

The Board may, in any financial year, expend out of the funds of the Corporation for purposes not authorised by this or any other Act any sum or sums not amounting in the whole to more than five hundred pounds.

An ordinary general meeting of shareholders of the Corporation shall be convened by the Board once in every year.

Every shareholder of the Corporation shall be entitled to vote at general meetings of the shareholders of the Corporation.

Every such shareholder shall at any such meeting be entitled to one vote for every share of which he is the registered proprietor.

Every shareholder shall be entitled to transfer his right of voting at any general meeting to any other shareholder as his proxy.

The shares of the Corporation shall be registered and transferable in the books of the Corporation.

The Board shall be entitled, without assigning any reason, to decline to accept any person whomsoever as the transferee of any share.

The Board may from time to time prescribe rules for the conduct of the business of the Corporation and the rules shall be observed by the Board in its conduct of that business.

The Board may from time to time amend or revoke any of such rules or make such additional rules as it thinks fit.

All such rules and all amendments or additions to any such rules shall be approved by the shareholders of the Corporation expressed at a general meeting of shareholders.

The Board may from time to time appoint a General Manager and such other officers and servants as it considers necessary for the efficient carrying out of the functions and powers of the Corporation under this Act, and may, out of the funds of the Corporation, pay to any such officers and servants such salaries and allowances as the Board from time to time determines.

The Board may, out of the funds of the Corporation and for the purpose of providing superannuation or retiring allowances for any of the officers or servants of the Corporation, subsidise the National Provident Fund or any other fund or scheme established with the approval of the Minister of Finance.

Part II of the First Schedule to the Public Bodies Contracts Act 1959 is hereby amended by inserting in its appropriate alphabetical order the following item:

No director shall be personally liable for any act or default done or made by the Board or by any director in good faith in the course of operations of the Board.

Any director of the Corporation who, otherwise than as such director, is directly or indirectly interested in any arrangement or agreement made or entered into, or proposed to be made or entered into by the Corporation shall, as soon as possible after the relevant facts have come to his knowledge, disclose the nature of his interest at a meeting of the Board.

A disclosure under this section shall be recorded in the minutes of the Board, and, except as otherwise provided by resolution of the Board, the director—