Approval to hold a stake in a financial sector company of more than 15% - Central Huijin Investment Ltd, Ministry of Finance of the Peoples' Republic of China, National Council for Social Security Fund of the PRC and SSF-Account for Sate-owned shares transfers

Administered by Department of the Treasury

Legislation au C2014G00515 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. Central Huijin Investment Ltd (Huijin), Ministry of Finance of the Peoples’ Republic of China (MOF), National Council for Social Security Fund of the PRC (SSF) and SSF-Account III for State-owned shares transfers (SSF III) and the persons named in Schedule 1 have applied to the Treasurer for an approval under section 13 of the Financial Sector (Shareholdings) Act 1998 (the Act), to hold a stake of more than 15% in Agricultural Bank of China Limited ABN 48 848 300 367 (the Company); and

 

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

 

I, Keith David Chapman, a delegate of the Treasurer, under subsection 14(1) of the Act, APPROVE the applicants holding a stake in the Company of 100%.

 

 

This Approval commences on the date it is signed and remains in force indefinitely.

Dated: 25 March 2014

 

[Signed]

 

 

Keith David Chapman

Executive General Manager

Diversified Institutions Division

 

 

 

 

 

Interpretation

In this Notice

applicants means Huijin, MOF, SSF, SSF III and the persons named in Schedule 1.

APRA means the Australian Prudential Regulation Authority.

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

PRC means Peoples’ Republic of China.

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 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.

 

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 (associates of Huijin, MOF, SSF and SSF III) who, together with Huijin, MOF, SSF, SSF III, applied for approval

 

ABC International Holding Limited

China Agricultural Finance Co., Ltd

ABC-CA Fund Management Co., Ltd

ABC Financial Leasing Co., Ltd

Agricultural Bank of China (UK) Limited

ABC Life Insurance Co., Ltd

ABC Hubei Hanchuan Rural Bank Limited Liability Company

ABC Hexigten Rural Bank Limited Liability Company

ABC Ansai Rural Bank Limited Liability Company

ABC Jixi Rural Bank Limited Liability Company

ABC Xiamen Tong’an Rural Bank Limited Liability Company

ABC Zhejiang Yongkang Rural Bank Limited Liability Company

 

 

Overview

The Financial Sector (Shareholdings) Act 1998 was enacted to address the need for regulation over significant shareholdings in financial sector companies to protect the stability and integrity of Australia's financial system. This Act was passed by the Commonwealth Parliament with the policy objective of ensuring that any substantial shareholding in a financial sector company does not compromise the financial system's soundness. The Act allows the Treasurer to approve or impose conditions on shareholdings exceeding 15% in financial sector companies, thereby maintaining control over entities that could pose systemic risks. This legislative framework is critical in safeguarding Australia's financial institutions from undue foreign influence and ensuring that any significant shareholdings are in the national interest.

Scope and Application

The Financial Sector (Shareholdings) Act 1998 applies to any person or entity that intends to acquire a stake of more than 15% in a financial sector company within Australia, and it mandates that such acquisitions require the approval of the Treasurer. The Act extends to Commonwealth, state, and territory levels, ensuring a national scope in regulating significant shareholdings in financial entities. The application of the Act is broad, encompassing various entities such as corporations, individuals, and foreign state-owned entities, as demonstrated by the approval process for Central Huijin Investment Ltd and other specified entities to hold a stake in Agricultural Bank of China Limited. The Act's geographic reach is national, with provisions for flow-on approvals if the primary company is a holding company for an authorised deposit-taking institution or an authorised insurance company. Notably, the Act allows for the Treasurer to impose conditions, vary existing approvals, or revoke approvals if deemed necessary for national security or financial stability, as illustrated by the approval granted under section 14 of the Act, which remains in force indefinitely until altered or revoked by the Treasurer.

Key Provisions

The Financial Sector (Shareholdings) Act 1998 (the Act) contains provisions that govern the approval process for entities seeking to hold a stake of more than 15% in a financial sector company. Section 13 of the Act outlines the application process for such approvals, while section 14 allows the Treasurer to grant or refuse the approval. In the present case, section 14(1) has been used to approve the applicants named in Schedule 1 to hold a stake of 100% in Agricultural Bank of China Limited. This approval is effective from the date it was signed and remains in force indefinitely. The Act imposes certain obligations and requirements on the parties involved. The applicants must apply to the Treasurer for approval before holding a stake in the financial sector company, and the Treasurer must consider whether it is in the national interest to grant the approval. Under section 16 of the Act, the Treasurer may impose conditions or vary existing conditions on the approval. Additionally, under section 17, the Treasurer may vary the percentage of the approved stake if it is in the national interest to do so. The Treasurer is also required to notify the applicant and the financial sector company of the approval and publish a copy of the notice in the Gazette. The Act also outlines potential consequences for breach of its provisions. Under section 11, a person or group of persons may be guilty of an offence if they acquire shares in a financial sector company that results in an unacceptable shareholding situation, either by creating one or increasing an existing stake, while being reckless as to the outcome. The maximum penalty for an individual is 400 penalty units, while for a body corporate, the maximum penalty is 2,000 penalty units. 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 an approval, or require the person to do something if it is in the court's opinion desirable to do so.

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Financial Law
Instrument
Gazette Notice
Concepts
Definitions & Interpretation
Offence Provisions
Regulatory Standards
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financial sector company
unacceptable shareholding situation

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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.