Approval to hold a stake in a financial sector company of more than 20%
Financial Sector (Shareholdings) Act 1998
SINCE:
A. Cuscal Limited ABN 95 087 822 455 (the applicant) has applied to the Treasurer under section 13 of the Financial Sector (Shareholdings) Act 1998 (the Act) for approval to hold a 100% stake in 86400 Holdings Pty Ltd ABN 36 621 802 097 and 86400 Ltd ABN 13 621 804 813 (the companies), which are financial sector companies under the Act; and
B. I am satisfied that it is in the national interest to approve the applicant holding a stake in the companies of more than 20%,
I, Brandon Khoo, a delegate of the Treasurer, under paragraph 14(1)(a) of the Act, APPROVE the applicant holding a 100% stake in the company.
Under subsection 16(1) of the Act, this Approval is subject to the conditions set out in the attached Schedule.
This approval has effect from the date it is signed and remains in force in accordance with the conditions imposed under subsection 16(1) of the Act.
Dated: 18 July 2019
[Signed]
…………………
Brandon Khoo
Executive General Manager
Diversified Institutions Division
Interpretation
In this Schedule:
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 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. Under subsection 19(1), if an Approval has been granted for the holding of a stake in a financial sector company that 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. Under subsection 19(3), if an Approval has been granted for a company to hold a stake in a financial sector company there is taken to be in force at that time an approval for each officer of the company to hold the same percentage stake in the financial sector 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 conditions
- The approval under this notice remains in force until the applicant’s total exposures, including capital support, to the 86400 group exceeds $100 million or a greater amount agreed in writing by APRA.[1]
- An application to increase the total exposures permitted under condition 1 in this Schedule must demonstrate that the applicant has sufficient capital for its future needs after the proposed investment and include a forecast showing the applicant’s projected future capital position after the proposed investment. The forecast should extend for at least two years.
In this Schedule:
APRA means the Australian Prudential Regulation Authority.
86400 group means 86400 Holdings Pty Ltd and its subsidiaries.
[1] This written agreement must be authorised by a General Manager or Executive General Manager of the Diversified Institutions Division or Specialised Institutions Division of APRA.