Public Finance (Mixed Ownership Model) Amendment Act 2012

9 New Part 5A inserted

• After Part 5, insert:

  “Part 5A
  “Mixed ownership model companies

  “Preliminary provisions

  “45P Definitions of mixed ownership model company and other terms

  • “(1) In this Act, mixed ownership model company means a company listed in Schedule 5.

    “(2) In this Part,—

    “10% limit has the meaning set out in section 45S

    “Crown means Her Majesty the Queen in right of New Zealand

    “excess securities means those shares or voting securities in which a person has a relevant interest in excess of the 10% limit

    “FMA means the Financial Markets Authority established under section 6 of the Financial Markets Authority Act 2011

    “relevant interest has the meaning given to it by sections 5 to 6 of the Securities Markets Act 1988

    “security has the meaning set out in paragraph (a) of the definition of that term in section 2(1) of the Securities Markets Act 1988

    “voting right means a currently exercisable right to cast a vote at meetings of shareholders of a company (and, for this purpose, a right is treated as currently exercisable even if section 45T(1)(c) applies to prevent its exercise), other than a right to vote that is exercisable only in 1 or more of the following circumstances:

    • “(a) during a period in which a payment or distribution (or part of a payment or distribution) in respect of the security that confers the voting right is in arrears or some other default exists:

    • “(b) on a proposal that affects rights attached to the security that confers the voting right:

    • “(c) on a proposal to put the company into liquidation:

    • “(d) during the liquidation of the company:

    • “(e) in respect of a special, immaterial, or remote matter that is inconsequential to control of the company

    “voting security means a security that confers a voting right.

  “45Q Treaty of Waitangi (Te Tiriti o Waitangi)

  • “(1) Nothing in this Part shall permit the Crown to act in a manner that is inconsistent with the principles of the Treaty of Waitangi (Te Tiriti o Waitangi).

    “(2) For the avoidance of doubt, subsection (1) does not apply to persons other than the Crown.

    “Compare: 1986 No 124 s 9

  “51% Crown control

  “45R Restriction on reduction of the Crown's holding below 51% control

  • “(1) No Minister who is a shareholder in a mixed ownership model company may take any of the following actions if it would result in the Crown having less than 51% control of the company:

    • “(a) sell or otherwise dispose of any shares in, or voting securities of, the company held in the Minister's name:

    • “(b) permit shares in, or voting securities of, the company to be allotted or issued to any person.

    “(2) A mixed ownership model company must not issue, acquire, or redeem shares in, or voting securities of, the company if the issue, acquisition, or redemption would result in the Crown having less than 51% control of the company.

    “(3) An issue, acquisition, or redemption of shares or voting securities is invalid and of no effect to the extent that it breaches subsection (2) (and, if more than 1 person has participated in an issue of shares or voting securities affected by this provision, the invalidity applies to the issue of shares or voting securities to those persons on a pro-rata basis).

    “(4) The Crown has less than 51% control of a mixed ownership model company, for the purposes of this section, if the Crown holds less than—

    • “(a) 51% of any class of issued shares in the company; or

    • “(b) 51% of any class of voting securities of the company.

  “10% limit

  “45S 10% limit on holdings by persons other than the Crown

  • “(1) No person (other than the Crown) may have a relevant interest in shares in, or voting securities of, a mixed ownership model company that comprise more than—

    • “(a) 10% of a class of issued shares in the company; or

    • “(b) 10% of a class of voting securities of the company.

    “(2) In this Part, 10% limit means the maximum relevant interest permitted under subsection (1).

    “(3) Subsection (1) is subject to section 45U.

  “45T Effect of exceeding 10% limit

  • “(1) Every person who contravenes section 45S must—

    • “(a) comply with any written notice that the person receives from the mixed ownership model company requiring that the person sell or otherwise dispose of interests in excess securities of the company, or take any other steps that are specified, for the purpose of ensuring that the 10% limit is not exceeded; and

    • “(b) without limiting paragraph (a), take the steps that are necessary to ensure that the person is no longer in contravention of that section at the end of 60 days after the date on which the person becomes aware, or ought to have become aware, of the contravention; and

    • “(c) while the person contravenes that section, not exercise or control the exercise of the voting rights attaching to the excess securities.

    “(2) A person has no right to be paid a dividend or other distribution in respect of the excess securities (despite the Companies Act 1993).

    “(3) An exercise of a voting right in contravention of subsection (1)(c) is of no effect and must be disregarded in counting the votes concerned.

    “(4) However, subsections (1)(c) and (3) do not invalidate a resolution if the votes concerned were counted by the company in good faith and without knowledge that the voting rights were exercised in contravention of subsection (1)(c).

    “(5) Nothing in section 45S or this section limits or prevents the constitution of a mixed ownership model company from providing for the 10% limit and the consequences of a person exceeding the 10% limit (including to implement, or to add to, the consequences set out in this section), and the company may, in accordance with the constitution, determine which shares or voting securities are the excess securities for the purposes of its application of this section.

    “Compare: 1988 No 234 s 36U

  “45U Exemption from 10% limit for trustee corporations and nominee companies, etc

  • “(1) A person (A) may exceed the 10% limit without contravening section 45S if—

    • “(a) A complies with both of the following subparagraphs:

      • “(i) A exceeds the 10% limit merely because A holds securities on behalf of another person in the ordinary course of business as a trustee corporation or nominee company; and

      • “(ii) section 31(1)(b) of the Securities Markets Act 1988 currently applies to A (and so exempts A as a trustee corporation or a nominee company under that Act); or

    • “(b) A exceeds the 10% limit merely because A is attributed with (under section 5B of the Securities Markets Act 1988) the relevant interests of another person who is exempt from the 10% limit under paragraph (a) or this paragraph.

    “(2) A person to whom subsection (1)(a) applies must—

    • “(a) keep under continuing review the transactions of all persons for whom A holds securities of the mixed ownership model company in A's name; and

    • “(b) inform the mixed ownership model company if any of those persons exceeds the 10% limit.

    “(3) The exemption under this section does not apply to a person who is currently designated under section 45V as no longer exempt.

    “Compare: 1988 No 234 ss 31–32A

  “45V Power of FMA to remove exemption from 10% limit for trustee corporations, nominee companies, etc

  • “(1) The FMA may, by notice in the Gazette, designate a person as no longer exempt under section 45U if it is satisfied that—

    • “(a) the person has not complied with the condition in section 45U(2); or

    • “(b) the exemption is being used for the purpose or purposes of circumventing, evading, or defeating the operation of the 10% limit taking into account the nature, substance, and economic effect of the interest or relationship or other facts (and not the mere form).

    “(2) The FMA may, by notice in the Gazette, revoke a designation under this section.

    “(3) A notice under this section takes effect from the date stated in the notice (which must not be earlier than the date of the Gazette notice).

    “(4) Before designating a person as no longer exempt, the FMA must—

    • “(a) do everything reasonably possible on its part to advise the person of the proposed designation; and

    • “(b) give the person a reasonable opportunity to make submissions to the FMA on the proposal.

    “(5) Subsection (4) does not apply to a designation if the FMA considers that it is desirable in the public interest for the exemption to be removed urgently.

    “(6) Failure to comply with subsection (4) does not invalidate the designation.

    “Compare: 1988 No 234 ss 48C, 48D

  “Continuing application of certain provisions

  “45W Certain provisions of State-Owned Enterprises Act 1986 and other enactments continue to apply

  • “(1) Sections 22 to 30(1) of the State-Owned Enterprises Act 1986, the provisions listed in subsection (2), and any Order in Council made at any time under any of those provisions continue to apply to a mixed ownership model company, despite it ceasing to be a State enterprise, as if—

    • “(a) the company were a State enterprise and a company named in Schedule 2 of the State-Owned Enterprises Act 1986; and

    • “(b) the Minister of Finance and the Minister responsible for that company were the shareholding Ministers for the company.

    “(2) The provisions are—

    • “(a) the definition of State forest land in section 2(1) and sections 24(1) and (6), 24B(4) to (6), and 61(2) of the Conservation Act 1987:

    • “(b) section 11 of the Crown Pastoral Land Act 1998:

    • “(c) sections 8A to 8H of the Treaty of Waitangi Act 1975.

    “Compare: 1998 No 99 s 3(2), (4)”.