Revocation of existing approval and granting of new approval to hold a stake in a financial sector company of more than 15%

Revocation of existing approval and granting of new approval to hold a stake in a financial sector company of more than 15%

To: The persons named in Schedule 1 (the EGL approval holders) and Schedule 2 (the holding companies)

SINCE

1. Each holding company has applied for approval under section 13 of the Financial Sector (Shareholdings) Act 1998 (the Act), to hold a stake of 100% in Gordian RunOff Limited ABN 11 052 179 647 (the insurer) and each 100% subsidiary of that holding company that is itself a holding company of the insurer;

B.     Each EGL approval holder having an approval under subsection 14(1) of the Act to hold a 100% stake in the insurer (the 20 February 2008 approval) has requested that approval be revoked from the time, if any, the approvals requested in Recital A. are granted; and

C.     I am satisfied it is in the national interest to grant each holding company the approvals requested in Recital A  

I, Stuart Bingham, a delegate of the Treasurer, under:

(a)   subsection 14(1) of the Act, APPROVE each holding company holding a 100% stake in the insurer and each 100% subsidiary of that holding company that is itself a holding company of the insurer; and

(b)   subsection 18(3) of the Act, REVOKE the 20 February 2008 approval.

This instrument comes into force on 30 June 2017 and remains in force indefinitely. 

Dated: 19 May 2017

[Signed]

Stuart Bingham

General Manager

Diversified Institutions Division

Interpretation

In this Notice:

100% subsidiary has the meaning given in section 3 of the Act

authorised insurance company has the meaning given in section 3 of the Act

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

holding company has the meaning given in section 4 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.  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 applicants 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 EGL approval holders

Enstar Group Limited (Bermuda)

Enstar Australia Holdings Pty Limited ACN 128 812 546

Mr Dominic Silvester

SCHEDULE 2 - the holding companies

 Enstar Group Limited (Bermuda)

Kenmare Holdings Ltd. (Bermuda)

Enstar Asia Holdings Limited (UK)

Enstar Asia Pacific Pty Ltd ABN 18 009 129 793

Enstar Australia Holdings Pty Limited ACN 128 812 546 and

AG Australia Holdings Limited ACN 054 573 401