EXPLANATORY STATEMENT
STATUTORY RULES 1985 NO 337
ISSUED BY THE AUTHORITY OF THE TREASURER
BANKS (SHAREHOLDINGS) ACT 1972
BANKS (SHAREHOLDINGS) REGULATIONS (AMENDMENT)
Section 10 of the Banks (Shareholdings) Act 1972 (the Act) generally limits the nominal amount of the voting shares of a bank incorporated in Australia in which a person (including a corporation) may have an interest to 10 per cent, or 15 per cent with the approval of the Treasurer, of the total nominal amount of the voting shares of the bank. Under sub-section 10(4) of the Act the Governor-General may, after application made to the Treasurer by a person, fix a higher percentage for that person by instrument published in the Gazette. Sub-section 10(3) provides that where a percentage is applicable in relation to a person, that person may not have a greater nominal amount of shares than the percentage so fixed.
The Governor-General of the Commonwealth of Australia on the recommendation of the Treasurer has granted a banking authority to IBJ Australia Bank Limited.
IBJ Australia Bank Limited is owned 50 per cent by The Industrial Bank of Japan, Ltd, a company incorporated in Japan, 30 per cent by Western Australian Development Corporation and 10 per cent by each of State Government Insurance Office (WA) and Town and Country WA Building Society. The Treasurer has agreed with proposals whereby the ownership structure will change in two stages so that the bank will be owned 75 per cent by The Industrial Bank of Japan, Ltd, 10 per cent by each of Western Australian Development Corporation and State Government Insurance Office (WA) and 5 per cent by Town and Country WA Building Society.
As required by the Act an instrument has been gazetted, which fixes a percentage of 75 per cent under sub-section 10(4) for The Industrial Bank of Japan, Ltd in relation to its interest in IBJ Australia Bank Limited.
In addition an instrument has been gazetted which fixes a percentage of 30 per cent under sub-section 10(4) for Western Australian Development Corporation in relation to its initial interest in IBJ Australia Bank Limited.
Under section 9 of the Act the associates (ie all officers, partners, subsidiaries etc) of The Industrial Bank of Japan, Ltd and Western Australian Development Corporation are also deemed to have the same interest in IBJ Australia Bank Limited as The Industrial Bank of Japan, Ltd and Western Australian Development Corporation. The Industrial Bank of Japan, Ltd made an application to the Treasurer for a ‘class’ instrument fixing a percentage of 75 per cent in respect of its officers, pursuant to sub-section 10 (5A) of the Act. Hence, an instrument has been gazetted, which declares that for the purposes of the Act the percentage of 75 per cent is also applicable to the persons who are from time to time relevant officers of The Industrial Bank of Japan, Ltd in respect to IBJ Australia Bank Limited.
In addition, Western Australian Development Corporation made an application to the Treasurer for a ‘class’ instrument fixing a percentage of 30 per cent in respect of its officers pursuant to sub-section 10(5A) of the Act. Hence an instrument has been gazetted which declares that for the purposes of the Act the percentage of 30 per cent is also applicable to the persons who are from time to time relevant officers of Western Australian Development Corporation in reapect to IBJ Australia Bank Limited.
Under the Act, however, it is not possible to make such a ‘class’ instrument for the interests of the associates of The Industrial Bank of Japan, Ltd and Western Australian Development Corporation other than for the relevant officers. These ‘other associates’, as defined in section 9, represent an extremely large and ever changing list of persons/corporations and rather than make an instrument, pursuant to sub-section 10(4), for every person within the meaning of section 9 it is convenient to prescribe these interests as provided for by section 17 and paragraph 8(9)(d).
Paragraph 8(9)(d) of the Act provides that a prescribed interest in a share that is an interest of such person, or of the persons included in such class of persons, as is prescribed shall be disregarded. The Banks (Shareholdings) Regulations (the Regulations) prescribed a class of persons in relation to their interests in banks listed in the Schedule to the Regulations deemed to be held by virtue of sub-section 9(2) of the Act and thus their interests are disregarded for the purposes of the Act. The effect of the amendments to the Regulations is to do the same in the case of IBJ Australia Bank Limited.
For each of the sixteen successful applicants announced by the Treasurer on 27 February 1985 which proceeds to the obtaining of a banking authority, a similar addition will be made to the Schedule to the Regulations.
Finally, Western Australian Development Corporation and Town and Country WA Building Society share a common director and the Act will therefore have the effect of deeming that person to have an interest in the bank of up to 40 per cent (depending upon the progress of the approved ownership restructuring mentioned above). A regulation has been made to prescribe the interest in the bank of such a person deemed to be held through Town and Country WA Building Society and, as a result, that interest will be disregarded. The person in question will, however, also benefit from the instrument under sub-section 10(5A) allowing interests of 30 per cent for the relevant officers of Western Australian Development Corporation. In the absence of the regulation a common director would require an instrument under section 10(4).
Details of the Regulations are as follows.
The Schedule to the Banks (Shareholdings) Regulations is amended by adding The Industrial Bank of Japan, Ltd and Western Australian Development Corporation to the Schedule in relation to IBJ Australia Bank Limited.
For the purposes of paragraph 8(9)(d) of the Act persons who are directors of both Western Australian Development Corporation and Town and Country WA Building Society are prescribed persons and the interest they have in IBJ Australia Bank Limited by virtue of sub-section 9(2) of the Act by reason that the person is an officer of Town and Country WA Building Society is a prescribed interest.