Foreign Acquisitions and Takeovers (Prohibition of Proposed Action) Order (No. 2) 2023
I, Jim Chalmers, Treasurer, being satisfied of the matters in subsection 67(1) of the Foreign Acquisitions and Takeovers Act 1975, make the following instrument.
Dated 20 July 2023
Dr Jim Chalmers
Treasurer
Contents
Part 1—Preliminary
1 Name
2 Commencement
3 Authority
4 Definitions
Part 2—Orders
5 Prohibited proposed actions
6 Directions
Part 1—Preliminary
1 Name
This instrument is the Foreign Acquisitions and Takeovers (Prohibition of Proposed Action) Order (No. 2) 2023.
2 Commencement
(1) Each provision of this instrument specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.
Commencement information |
Column 1 | Column 2 | Column 3 |
Provisions | Commencement | Date/Details |
1. Sections 1 to 5 and anything in this instrument not elsewhere covered by this table | The day this instrument is registered. | |
2. Section 6 | The 31st day after this instrument is registered. | |
Note: This table relates only to the provisions of this instrument as originally made. It will not be amended to deal with any later amendments of this instrument.
(2) Any information in column 3 of the table is not part of this instrument. Information may be inserted in this column, or information in it may be edited, in any published version of this instrument.
3 Authority
This instrument is made under the Foreign Acquisitions and Takeovers Act 1975.
4 Definitions
Note: Expressions have the same meaning in this instrument as in the Foreign Acquisitions and Takeovers Act 1975 as in force from time to time—see paragraph 13(1)(b) of the Legislation Act 2003.
In this instrument:
ABN has the meaning given by the A New Tax System (Australian Business Number) Act 1999.
ACN has the meaning given by the Corporations Act 2001.
Alita Resources means Alita Resources Limited (ABN 56 147 393 735).
Austroid Australia means Austroid Australia Pty Ltd (ACN 664 535 899).
Austroid Corporation means the corporation incorporated with that name in the State of Nevada in the United States of America.
the Act means the Foreign Acquisitions and Takeovers Act 1975.
Part 2—Orders
5 Prohibited proposed actions
Under subsection 67(2) of the Act, the following proposed actions are prohibited:
(a) the whole of the proposed acquisition by Austroid Corporation of an additional 90.10% interest in Alita Resources (which would have the effect of increasing Austroid Corporation’s interest in Alita Resources to 100%); and
(b) the whole of the proposed acquisition by Austroid Australia of a 100% interest in Alita Resources.
6 Directions
Under subsection 67(3) of the Act:
(a) Austroid Corporation is directed not to acquire any further interest in securities in Alita Resources if doing so will result in an increase in the proportion of interests it holds in Alita Resources exceeding 9.90%; and
(b) Austroid Australia is directed not to acquire any interest in securities in Alita Resources.
Overview
The Foreign Acquisitions and Takeovers (Prohibition of Proposed Action) Order (No. 2) 2023 was enacted to address specific concerns related to foreign acquisitions and takeovers that could potentially impact national security or other significant policy objectives. This order was made under the Foreign Acquisitions and Takeovers Act 1975 and was introduced by Dr Jim Chalmers, the Treasurer, to prevent certain actions that could compromise Australia's interests. The primary objective of this legislation is to prohibit specific proposed acquisitions that have been identified as potentially harmful. The order specifically targets the proposed acquisition by Austroid Corporation of an additional 90.10% interest in Alita Resources, thereby increasing its total interest to 100%, as well as the proposed acquisition by Austroid Australia of a 100% interest in Alita Resources. Additionally, the order includes directives to Austroid Corporation and Austroid Australia to refrain from further acquisitions that would increase their stakes in Alita Resources beyond certain thresholds.
Scope and Application
The Foreign Acquisitions and Takeovers (Prohibition of Proposed Action) Order (No. 2) 2023 applies to the entities Austroid Corporation and Austroid Australia, prohibiting specific proposed acquisitions of shares in Alita Resources. This instrument is enacted under the authority of the Foreign Acquisitions and Takeovers Act 1975 and comes into effect on the date of registration, with certain sections taking effect 31 days after registration. The prohibitions extend to any further acquisition of securities in Alita Resources by Austroid Corporation that would increase its ownership beyond 9.90% and any acquisition by Austroid Australia. This order has a national jurisdictional reach, impacting transactions and entities within Australia, and is subject to the definitions and provisions outlined in the Foreign Acquisitions and Takeovers Act 1975. The Act applies to all entities and individuals involved in the specified transactions, with no stated exclusions or exemptions within this instrument. Subordinate instruments may further extend or restrict the application of the Act.
Key Provisions
The Foreign Acquisitions and Takeovers (Prohibition of Proposed Action) Order (No. 2) 2023, made under the Foreign Acquisitions and Takeovers Act 1975, provides specific prohibitions and directions regarding certain proposed acquisitions. Section 5 of the Order (paragraphs 5(a) and 5(b)) explicitly prohibits two significant proposed actions: first, Austroid Corporation's proposed acquisition of an additional 90.10% interest in Alita Resources, which would result in Austroid Corporation holding 100% of Alita Resources, and second, Austroid Australia's proposed acquisition of a 100% interest in Alita Resources. These prohibitions are designed to prevent the specified increases in shareholdings by the respective entities.
The Order, as stated in section 6, imposes specific obligations on Austroid Corporation and Austroid Australia. Austroid Corporation is directed not to acquire any further interest in securities in Alita Resources if such acquisition would result in the corporation holding more than 9.90% of the interests in Alita Resources. This directive ensures that Austroid Corporation does not exceed a 9.90% shareholding limit in Alita Resources. Additionally, Austroid Australia is directed not to acquire any interest in securities in Alita Resources at all. These obligations are intended to maintain control over the acquisition activities of the specified entities concerning Alita Resources.
Failure to comply with the provisions of this Order may result in legal consequences. While the Order itself does not explicitly state penalties, breaches of the Foreign Acquisitions and Takeovers Act 1975 can lead to civil and criminal penalties. Under the Act, individuals and entities found in breach of the Act's provisions can face substantial fines. For corporations, the maximum penalty for contraventions can amount to $10.5 million, or three times the benefit obtained through the contravention, whichever is greater. For individuals, the penalties can include fines up to $210,000 for corporations and $42,000 for individuals, along with potential imprisonment terms. These stringent penalties underscore the importance of compliance with the Act and the Order.