Approval to hold a stake in a financial sector company of more than 15%

Administered by Department of the Treasury

Legislation au C2017G00686 In force Gazette

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Approval to hold a stake in a financial sector company of more than 15%

 

Financial Sector (Shareholdings) Act 1998

 

 

SINCE

 

  1. HKSCC Nominees Limited, the government of the People's Republic of China (the Chinese Government), China Merchants Group Limited and the person(s) named in the attached Schedule (the applicants) have applied to the Treasurer under section 13 of the Financial Sector (Shareholdings) Act 1998 (the Act), for approval to hold a stake of more than 15% in China Merchants Bank Co., Ltd.  ABN 96 609 857 383 (the Company), a financial sector company under the Act; and

 

B.                 I am satisfied that it is in the national interest to approve the applicants holding a stake in the Company of more than 15%,

 

I, Louis Serret, a delegate of the Treasurer, under subsection 14(1) of the Act, APPROVE the applicants holding a stake in the Company of the respective percentages set out in the attached Schedule.

 

This Approval commences on the date it is signed and remains in force indefinitely. Dated: 16 June 2017

[Signed]

Louis Serret

Acting Executive General Manager Specialised Institutions Division

Interpretation Document ID: 226859

 

In this Notice:

financial sector company has the meaning given in section 3 of the Act.

stake in relation to a company, has the meaning given in clause 10 of Schedule 1 to the Act.

unacceptable shareholding situation has the meaning given in section 10 of the Act.

Note 1


Under paragraph 16(2)(a) of the Act, the Treasurer may, by written notice given to a person who

holds an Approval under section 14, impose one or more conditions or further conditions to which the Approval is subject. Under paragraph 16(2)(b) of the Act, the Treasurer may revoke or vary any condition imposed   under paragraph 16(2)(a) of the Act or specified in the Notice of Approval. The Treasurer’s power under subsection 16(2) of the Act may be exercised on the Treasurer’s own initiative or on application made to the Treasurer in accordance with the requirements of subsection 16(4) of the Act, by the person who holds the Approval (see subsection 16(3) of the Act).

Note 2


A person who holds an Approval under section 14 may apply to the Treasurer under section 17(1) of

the Act, to vary the percentage specified in the Approval.

Note 3


Under subsection 17(6) of the Act, the Treasurer may, on the Treasurer’s own initiative, by written

notice given to a person who holds an Approval under section 14, vary the percentage specified in the Approval if the Treasurer is satisfied that it is in the national interest to do so.

Note 4


The circumstances in which the Treasurer may revoke a person’s Approval under section 14 are set

out in subsection 18(1) of the Act.

Note 5


Section 19 of the Act provides for flow-on approvals. If an Approval has been granted for the

holding of a stake in a financial sector company and the financial sector company is a holding company for an authorised deposit-taking institution or an authorised insurance company, then an approval is taken to exist for the holding of a stake of equal value in each financial sector company that is a 100% subsidiary of the holding company.

Note 6


Under section 14 of the Act, the Treasurer must give written notice of this Approval to the applicant

and financial sector company concerned, and must publish a copy of this Notice in the Gazette.

Note 7


Under section 11 of the Act, a person or 2 or more persons under an arrangement are guilty of an

offence if the person(s) acquires shares in a company and the acquisition has the result, in relation to a financial sector company, that:

(i)         an unacceptable shareholding situation comes into existence; or

(ii)       if an unacceptable shareholding situation already exists in relation to the company and in relation to a person – there is an increase in the stake held by the person in the company;

and the person(s) was reckless as to whether the acquisition would have that result. A maximum penalty of 400 penalty units applies or by virtue of subsection 4B(3) of the Crimes Act 1914, in the case of a body corporate, a penalty not exceeding 2,000 penalty units. By virtue of section 39 of the Act, an offence against section 11 is an indictable offence.

Schedule - the person(s) who applied for approval

 

 

 

China Merchants Steam Navigation Company Ltd. China Ocean Shipping (Group) Company

Shenzhen Yan Qing Investment and Development Company Ltd. China Merchants Finance Investment Holdings Co. Ltd.

Shenzhen Chu Yuan Investment and Development Company Ltd. COSCO Shipping (Guangzhou) Co., Ltd.

China Communications Construction Company Limited SAIC Motor Corporation Limited

Hebei Port Group Co.,Ltd

 

Shandong State-Owned Assets Investment Holdings Co.,Ltd CCCC Guangzhou Dredging Co., Ltd.

Guangzhou Haining Maritime Service Co. Shanghai International Port (Group) Co., Ltd COSCO Shipping (Shanghai) Company

China National Offshore Oil Corporation Investment Co., Ltd. Shanghai Jiushi (Group) Co., Ltd

Zhejiang Zheneng Electric Power Co., Ltd China National Technical Imp. & Exp. Corp. Jilin Transportation Investment Group Co., Ltd China National Electronics Imp. & Exp. Corp. CCCC Shanghai Dredging Co., Ltd

Shanghai Airport Authority

 

China Reform Investment Co., Ltd.

Shenzhen Long Gang City Construction Investment Co., Ltd. CCCC Fourth Harbor Engineering Co., Ltd

Beijing Huayuan Group Co.,Ltd Guangzhou Port Group Co.,Ltd.

Guangdong Road & Bridge Construction Development Co.,Ltd China Meheco Co.,Ltd.

Zhen Hua Engineering (Shenzhen) Co., Ltd. Ministry of Transport Shanghai Salvage Company Sichuan Road & Bridge Co., Ltd.

Shenzhen SFTZ (Group) Co., Ltd.

 

Shanghai Transportation Investment (Group) Co., Ltd.

 

Beijing North Star Industrial Group Limited Liabilities Company Wuxi Guolian Development (Group) Company Limited

Sichuan Expressway Construction & Development Corporation CCCC Third Harbor Consultants Co., Ltd

Zhejiang State-owned Assets Management Co., Ltd. Shanghai Nong Gong Shang Supermarket Co., Ltd.

Shanghai Medicines & Health Products Import & Export Co.,Ltd. State Development & Investment Corporation

China General Technology (Group) Holding, Ltd. Chongqing City Construction Investment Corporation Anshan Iron and Steel Group Corporation

China United Network Communications Corporation Limited Zhangzhou Nine Longjiang Construction Co.,Ltd

Shanghai Rongtian Investment Consulting Company Limited

Schedule - the financial sector company and respective stake approved

 

 

Approval is given under subsection 14(1) of the Act for:

 

HKSCC Nominees Limited to hold a stake in the Company of 18 per cent; The Chinese Government to hold a stake in the Company of 49 per cent; and

China Merchants Group Limited and each of the persons listed in schedule 1, by their associate relationship with the Chinese Government, to hold a stake in the Company of 49 per cent.

Overview

The Financial Sector (Shareholdings) Act 1998 was enacted to address the need for oversight and regulation of foreign investments in Australia's financial sector. This Act ensures that significant holdings in financial sector companies are subject to scrutiny to safeguard national security and financial stability. The Act was introduced by the Australian Parliament to provide the Treasurer with the authority to approve or disapprove significant shareholdings in financial sector companies and to impose conditions on such approvals if deemed necessary in the national interest. The policy objective of the Act is to protect Australia's financial system from potential risks associated with foreign ownership and control. The approval process involves the Treasurer assessing applications from entities seeking to acquire or increase their shareholdings in financial sector companies beyond the 15% threshold, ensuring that such acquisitions do not compromise national security or financial stability.

Scope and Application

The Financial Sector (Shareholdings) Act 1998 applies to entities or persons seeking to acquire a stake of more than 15% in a financial sector company as defined in the Act. This includes any individual or corporate entity proposing to hold such a stake, directly or indirectly, through an arrangement. The Act has a national jurisdictional reach, operating under the Commonwealth of Australia. It extends to all financial sector companies operating within Australia, irrespective of whether the entities or individuals seeking to acquire the stake are foreign or domestic. The Act does not specify any exclusions, but it does allow the Treasurer to impose conditions, vary those conditions, or revoke the approval if deemed necessary in the national interest. The Act also provides for flow-on approvals in cases where the financial sector company is a holding company for an authorised deposit-taking institution or an authorised insurance company, where an approval for the parent company extends to its 100% subsidiaries. The approval granted to the applicants is effective from the date of signing and remains in force indefinitely, unless otherwise varied or revoked by the Treasurer.

Key Provisions

The Financial Sector (Shareholdings) Act 1998 (the Act) is the legislation governing the approval of shareholdings in financial sector companies. Section 14(1) of the Act allows the Treasurer to approve an application for holding a stake in a financial sector company that exceeds 15%, and in this case, the approval has been granted to HKSCC Nominees Limited, the government of the People's Republic of China, China Merchants Group Limited, and several other parties listed in the attached Schedule. The approval specifies the respective percentages of the stake that each party is permitted to hold in China Merchants Bank Co., Ltd., a financial sector company. This Approval is in force indefinitely from the date it is signed. The Act imposes certain obligations on the parties to whom the Approval is granted. These obligations include complying with any conditions or further conditions that the Treasurer may impose under section 16(2)(a) of the Act. The Treasurer may also revoke or vary any condition imposed under section 16(2)(a) of the Act or specified in the Notice of Approval. Additionally, the Treasurer may vary the percentage specified in the Approval under section 17(6) of the Act if it is in the national interest to do so. The parties must also comply with any flow-on approvals under section 19 of the Act, which applies if the financial sector company is a holding company for an authorised deposit-taking institution or an authorised insurance company. There are also potential offences and penalties for breach of the Act. Section 11 of the Act makes it an offence for a person or group of persons under an arrangement to acquire shares in a company if the acquisition results in an unacceptable shareholding situation or an increase in the stake held by a person in the company, and the person was reckless as to whether the acquisition would have that result. The maximum penalty for an individual is 400 penalty units, while for a body corporate, the maximum penalty is 2,000 penalty units. An offence against section 11 is an indictable offence, meaning that it is a serious criminal offence that can be prosecuted in a higher court.

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Area of Law
Finance & Banking Law
Instrument
Statutory Instrument
Concepts
Definitions & Interpretation
Regulatory Standards
Enforcement Powers
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Approval
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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.