Revocation of approval to hold a stake in a financial sector company of more than 15% - Presidian Pty Ltd

Administered by Department of the Treasury

Legislation au C2015G00108 In force Gazette

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

Financial Sector (Shareholdings) Act 1998

To: Presidian Pty Ltd ABN 80 161 877 005 (Presidian) and each of the persons named in the attached schedule (the applicants)

 

SINCE

 

  1. The applicants hold an Approval dated 19 September 2013 under subsection 14(1) of the Financial Sector (Shareholdings) Act 1998 (the Act), to hold a stake of 100% in Avea Insurance Limited ABN 18 009 129 793 (the Company), a financial sector company under the Act; and

 

B.                 Presidian, on behalf of itself and its associates, has requested that the Approval be revoked,

 

I, Gordon Walker, a delegate of the Treasurer, under subsection 18(3) of the Act, REVOKE the Approval.

 

This revocation comes into force on the completion of the sale and acquisition of the shares in the Company within the meaning of, and under the Share Acquisition Agreement- Avea Insurance Limited, provided to APRA on 24 November 2014, being the date that Presidian Pty Ltd will cease to hold a stake in the Company. 

Dated: 9 January 2015

 

[Signed]

 

 

Gordon Walker

Acting General Manager

Specialised Institutions Division

South West Region

 

 

 

 

 

 

 

Interpretation

In this Notice:

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 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 2 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 3 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 4 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 5 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 6 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 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 – associates of Presidian

 

Steven Kloss Pty Ltd ACN 083 227 552

Kilienz Pty Ltd ACN 078 276 338

Four Us Pty Ltd ACN 076 542 526

Rainbow TJP Superannuation Fund Pty Ltd ACN 161 369 562

Rainbow LOZ Superannuation Fund Pty Ltd ACN 161 369 508

Rainbow LCP Superannuation Fund Pty Ltd ACN 161 369 571

Rainbow End Investments Pty Ltd ACN 067 489 329

 

 

 

 

 

Overview

The Financial Sector (Shareholdings) Act 1998 was enacted to address the need for regulation of shareholdings in financial sector companies, particularly to prevent unacceptable concentrations of ownership that could pose systemic risks to the financial system. This Act provides the Treasurer with the authority to approve or reject significant shareholdings in financial sector companies, with a specific focus on maintaining the stability and integrity of the financial system. The Act was enacted by the Commonwealth Parliament, reflecting the national interest in safeguarding the financial sector against undue influence or control by any single entity or group of entities. The policy objective of the Act is to ensure that shareholdings in financial sector companies do not reach levels that could compromise the soundness and resilience of the financial system. By allowing the Treasurer to impose conditions on shareholdings or revoke approvals where necessary, the Act aims to mitigate potential risks arising from excessive or concentrated shareholdings. The revocation of an approval, as seen in the case of Presidian Pty Ltd and its associated entities, underscores the Act's role in dynamically managing shareholdings to align with national financial stability interests.

Scope and Application

The Financial Sector (Shareholdings) Act 1998 applies to entities, including corporations and individuals, who hold or propose to hold a stake in a financial sector company. This Act governs the approval process for any shareholding that exceeds 15% in a financial institution, ensuring that such shareholdings do not compromise the stability of the financial sector. The Act's jurisdiction is at the Commonwealth level, meaning it applies across Australia and affects all entities within the financial sector as defined by the Act. The Treasurer, as the relevant authority under the Act, has the power to approve or revoke such shareholdings, as well as impose conditions or vary existing approvals. The Act includes provisions for the revocation of approval upon specific conditions being met, such as the completion of a sale or acquisition, as illustrated in the case of Presidian Pty Ltd. The Act also provides mechanisms for the enforcement of its provisions, including the power of the Federal Court to grant injunctions against entities contravening its terms.

Key Provisions

The Financial Sector (Shareholdings) Act 1998 provides various mechanisms for the regulation of shareholdings in financial sector companies. One of the key provisions is the ability to grant approvals for the holding of specific stakes in financial sector companies (section 14(1)). For example, in this case, Presidian Pty Ltd was granted an approval to hold a 100% stake in Avea Insurance Limited, a financial sector company. This approval was subject to certain conditions and could be varied or revoked by the Treasurer (subsection 18(3)). The Act imposes several obligations on the parties involved. Firstly, the Treasurer must notify the applicant and the relevant financial sector company of the approval and publish a copy in the Gazette (section 14). Furthermore, the Treasurer has the authority to impose, vary, or revoke conditions attached to the approval, either on their own initiative or in response to an application by the applicant (subsection 16(2)). The applicants also have the right to apply for variations to the percentage specified in their approval (subsection 17(1)), and the Treasurer can unilaterally vary the approval if they believe it to be in the national interest (subsection 17(6)). Failure to comply with the conditions of the approval or engaging in conduct that contravenes these conditions can lead to serious consequences. For instance, if an acquisition of shares results in an "unacceptable shareholding situation" (section 10) and the person was reckless as to this outcome, they may be found guilty of an offence (section 11). The maximum penalty for an individual is 400 penalty units, while a body corporate may face a penalty of up to 2,000 penalty units (subsection 4B(3) of the Crimes Act 1914). Additionally, the Federal Court may grant an injunction to restrain or require specific conduct if a person engages in or proposes to engage in conduct that contravenes the conditions of an approval (section 32(3)). In summary, the Financial Sector (Shareholdings) Act 1998 provides a framework for the regulation of shareholdings in financial sector companies, including the ability to grant, vary, and revoke approvals. The Act imposes obligations on the applicants and the Treasurer, with potential criminal and civil consequences for non-compliance.

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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.