Approval to hold a stake in a financial sector company of more than 15% - Badger International (Pty) Limited

Administered by Department of the Treasury

Legislation au C2018G00344 In force Gazette

Legislation content

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

Financial Sector (Shareholdings) Act 1998

To: Badger International (Pty) Limited (Badger) and the person(s) named in Schedule 1 (the applicants)

 

SINCE

 

  1. Each of the applicants has applied for approval under section 13 of the Financial Sector (Shareholdings) Act 1998 (the Act), to hold a stake of 100% in:

 

  1. Pacific International Insurance Pty Limited ABN 83 169 311 193, an authorised insurance company under the Act (the insurer); and
  2. each company which will be a holding company of the insurer from the time Badger acquires a 100% stake in the insurer – Badger International (NZ) LP, Gramar Family Holdings Pty Ltd and Rapid Solutions Holdings Pty Ltd;

 

B.     I am satisfied it is in the national interest to approve each applicant holding a 100% stake in the insurer and each company that will be a holding company of the insurer from the time Badger acquires a 100% stake in the insurer

 

I, Louis Serret, a delegate of the Treasurer, under subsection 14(1) of the Act, APPROVE each applicant holding a 100% stake in the insurer and a 100% stake in each company that will be a holding company of the insurer from the time Badger acquires a 100% stake in the insurer.

 

This instrument comes into force from the time Badger acquires a 100% stake in the insurer. 

Dated 7 May 2018

[Signed]

 

 

 

Louis Serret

General Manager

Specialised Institutions Division

Interpretation

In this Notice:

 

100% subsidiary has the meaning given in section 3 of the Act

authorised insurance company has the meaning given in section 3 of the Act

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

holding company has the meaning given by section 4 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 conditions imposed under paragraph 16(2)(a) of the Act or specified in the Notice of Approval. The Treasurer’s powers under subsection 16(2) may be exercised on the Treasurer’s own initiative or an 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 of the Act may apply to the Treasurer under subsection 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 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 applicants 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.

 

Note 8 Under section 32(3) of the Act, if a person has engaged in or is proposing to engage in any conduct in contravention of a condition to which an approval under section 14 is subject, the Federal Court may, on the application of the Treasurer, grant an injunction:

(i)                  restraining the person engaging in the conduct; and

(ii)                if in the court’s opinion, it is desirable to do so, requiring the person to do something.

 

 

 

SCHEDULE 1 - the persons, in addition to Badger, who applied for approval to hold a 100% stake in the insurer

 

  1. Badger International (NZ) LP (New Zealand)
  2. Badger GP Limited (New Zealand)
  3. HFT (2017) Limited (New Zealand) as trustee for The Hogan Family (NZ) Trust
  4. Badger Mutual Wealth (Pty) Ltd  (South Africa)
  5. Brad Howard Hogan
  6. Lindsay McKinnon Hogan (as a trustee of the Hogan Family Trust)
  7. Phillip de Jager (as a trustee of the Hogan Family Trust)

 

Note 1: The place of incorporation of each of the companies in Schedule 1 appears in the brackets after the name of the company  

 

 

Overview

The Financial Sector (Shareholdings) Act 1998 was enacted by the Parliament of Australia to address the potential risks to the stability and integrity of the financial sector posed by excessive or inappropriate shareholdings in financial institutions. This Act is designed to regulate significant shareholdings in financial sector companies, ensuring that they do not lead to unacceptable situations that could threaten the national financial system. The Act provides the Treasurer with the authority to approve or disapprove significant shareholdings and to impose conditions on such approvals to safeguard the financial sector. The policy objective of the Act is to maintain the soundness and resilience of the financial system by preventing undue concentration of ownership and control that may compromise the proper functioning of financial institutions. The Act empowers the Treasurer to grant approval for the acquisition or holding of a stake in a financial sector company, subject to certain conditions, to ensure that the national interest is protected. This legislative instrument, Gazette C2018G00344, serves as an approval notice for Badger International (Pty) Limited and other specified entities to hold a 100% stake in Pacific International Insurance Pty Limited and its holding companies. The approval is granted on the basis that it is in the national interest, reflecting the importance of maintaining stability and confidence in the financial sector. The Treasurer, as a delegate, exercises this power to ensure that the financial sector remains robust and capable of withstanding economic shocks.

Scope and Application

The Financial Sector (Shareholdings) Act 1998 applies to any person or entity seeking to hold a stake in a financial sector company, specifically where the stake exceeds a 15% threshold. This legislation governs the approval process for such shareholdings, ensuring they align with national interests and regulatory standards. The Act applies to financial sector companies, which include authorised insurance companies and their holding companies, and encompasses both domestic and international entities that have a stake in Australian financial institutions. The Act’s jurisdiction spans the Commonwealth, providing a national framework for regulating significant shareholdings in the financial sector. Exclusions or exemptions are not explicitly detailed within the Act, although the Act does provide mechanisms for the Treasurer to impose conditions, vary percentages, or revoke approvals as necessary. This regulatory flexibility is further extended through subordinate instruments that can modify the application of the Act, ensuring it remains responsive to evolving financial landscapes and national interests.

Key Provisions

The Financial Sector (Shareholdings) Act 1998 (the Act) contains provisions concerning the approval of shareholdings in financial sector companies. Section 13 of the Act provides for the application process for approval to hold a stake in a financial sector company, while section 14 allows the Treasurer to approve such holdings. In this instance, the delegate of the Treasurer, Louis Serret, has granted approval under section 14 to Badger International (Pty) Limited and the individuals listed in Schedule 1 to hold a 100% stake in Pacific International Insurance Pty Limited and the specified holding companies. This approval is effective from the moment Badger acquires a 100% stake in the insurer. Under the Act, the applicants and other entities must adhere to several obligations and requirements. These include ensuring that the shareholdings do not result in an "unacceptable shareholding situation" as defined in section 10 of the Act. Additionally, the Act mandates that the Treasurer be notified and provide written notice to the applicants and the financial sector company concerned. Furthermore, the approval can be subject to conditions or further conditions, which the Treasurer may impose, revoke, or vary under sections 16 and 17 of the Act. The Act also delineates various offences and penalties for breaches. For instance, section 11 makes it an offence for a person or group to acquire shares in a company if it results in an "unacceptable shareholding situation" and the person was reckless as to the outcome. The maximum penalty for such an offence is 400 penalty units for individuals and 2,000 penalty units for bodies corporate. Additionally, under section 32(3), the Federal Court may grant an injunction to restrain a person from engaging in conduct that contravenes a condition of the approval, or to require the person to do something if deemed desirable.

Legal classification tags

Area of Law
Financial Regulation
Instrument
Gazette Notice
Concepts
Definitions & Interpretation
Reporting & Disclosure Obligations
Offence Provisions
Catchwords
unacceptable shareholding situation

Interactions

Authorises

All Versions

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.