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

Administered by Department of the Treasury

Legislation au C2016G01448 In force Gazette

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

Financial Sector (Shareholdings) Act 1998

To: The persons named in schedule 1 (‘the applicants’)

 

SINCE

 

  1. Each of the applicants has applied for approval under section 13 of the Financial Sector (Shareholdings) Act 1998 (the Act), to hold a stake of 100% in the financial sector companies in schedule 2 (‘the financial sector companies’);

 

B.     Each of the persons in schedule 3 (collectively ‘the existing approval holders’) currently hold approval under subsection 14(1) of the Act to hold a 100% stake in the financial sector companies in schedule 4 (‘the current approval’);

 

C.     Each of the existing approval holders (except for Wolverine Merger Sub, Inc which no longer exists) has requested that the current approval be revoked from the time the applicants are granted an approval to hold a 100% stake in the financial sector companies in schedule 2; and

 

D.    I am satisfied it is in the national interest to grant the applicants approval under subsection 14(1) of the Act to hold a 100% stake in the insurer,  

 

I, Stephen Glenfield, a delegate of the Treasurer, under:

 

(a)   subsection 14(1) of the Act, APPROVE the applicants holding a 100% stake in the financial sector companies in schedule 2; and

 

(b)   subsection 18(3) of the Act, REVOKE the instrument made on 24 July 2014 granting the existing approval holders approval to hold a 100% stake in the financial sector companies in schedule 4.

This instrument comes into force on the date it is signed and remains in force indefinitely. 

 

 

 

 

Dated: 17 October 2016

[Signed]

 

 

Stephen Glenfield

General Manager

Specialised Institutions Division

South West Region

 

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

stake has the meaning given by 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 applicants who applied for approval to hold a 100% stake in the financial sector companies in schedule 2

 

  1. Jon Winkelried
  2. Eric Wayne Leathers
  3. Peter MacDonald McGoohan
  4. John Michael Kelly
  5. Denis J. O’Leary
  6. John Park
  7. Randy Philip Parker
  8. Thomas Woodrow Warsop III
  9. James J. Scanlan
  10. David Bonderman
  11. James Coulter
  12. Wolverine Advisors, Inc (Cayman)
  13. TWG Holdings Limited (Bermuda)
  14. Wolverine InterCo Inc (Delaware)
  15. Wolverine Acquisitions, Inc (Delaware)
  16. The Warranty Group (Illinois)
  17. TWG Holdings Inc (Illinois)

 

SCHEDULE 2 – the financial sector companies

 

  1. Wolverine Advisors, Inc (Cayman)
  2. TWG Holdings Limited (Bermuda)
  3. Wolverine InterCo, Inc (Delaware)
  4. Wolverine Acquisitions, Inc (Delaware)
  5. The Warranty Group, Inc (Delaware)
  6. TWG Holdings, Inc (Delaware)
  7. Virginia Surety Company, Inc

 

SCHEDULE 3 - persons who have an approval dated 24 July 2014 to hold a 100% stake in the financial sector companies in schedule 4

 

  1. David Bonderman
  2. James G. Coulter
  3. Clive Denis Bode
  4. TPG Advisors VI-AIV Inc (Cayman)
  5. TPG VI Wolverine, LP (Cayman)
  6. TPG VI Wolverine Co-Invest, LP (Cayman)
  7. Wolverine Advisors, Inc (Cayman)
  8. Wolverine Holdings S.ar.l (Luxembourg)
  9. Wolverine InterCo Inc (Delaware)
  10. Wolverine Acquisitions, Inc (Delaware)
  11. Wolverine Merger Sub, Inc (Delaware)
  12. The Warranty Group (Illinois)
  13. TWG Holdings Inc (Illinois)

 


SCHEDULE 4 – financial sector companies subject of the approval dated 24 July 2014

 

  1. Wolverine Advisors, Inc (Cayman)
  2. Wolverine Holdings S.ar.l (Luxembourg)
  3. Wolverine InterCo Inc
  4. Wolverine Acquisitions, Inc
  5. Wolverine Merger Sub, Inc
  6. The Warranty Group
  7. TWG Holdings Inc
  8. Virginia Surety Company

 

Overview

The Financial Sector (Shareholdings) Act 1998 was enacted to address the need for regulation and oversight of significant shareholdings in financial sector companies to safeguard the stability and integrity of the Australian financial system. This legislation was introduced to ensure that the concentration of ownership and control in the financial sector does not pose undue risks to the national economy. The Act was enacted by the Parliament of Australia, reflecting a commitment to maintaining a robust and secure financial environment. The primary policy objective of the Act is to prevent unacceptable shareholding situations that could compromise the operations of financial sector companies, thereby protecting consumers and maintaining confidence in the financial system. The Act provides the Treasurer with the authority to approve, condition, vary, or revoke shareholdings in financial sector companies, ensuring that any significant changes in ownership are assessed for their potential impact on financial stability.

Scope and Application

The Financial Sector (Shareholdings) Act 1998 applies to persons and entities seeking to hold significant stakes in financial sector companies. Specifically, this Act governs the approval process for shareholdings exceeding 15% in entities within the financial sector. In this context, the Act facilitates the granting of new approvals to applicants for holding a 100% stake in certain financial sector companies while simultaneously revoking existing approvals held by other entities. The geographic reach of this legislation is national, as it pertains to the Commonwealth of Australia and its financial institutions. The Act allows the Treasurer to impose conditions or further conditions on approvals, vary the percentage specified in an approval, or revoke an approval if deemed necessary in the national interest. These powers can be exercised either on the Treasurer's initiative or in response to an application by the approval holder. Additionally, the Act provides for flow-on approvals where a holding company has approval, extending this to its 100% subsidiaries. The legislation also sets out criminal penalties for creating unacceptable shareholding situations recklessly and allows the Federal Court to grant injunctions against conduct that contravenes approval conditions.

Key Provisions

The Financial Sector (Shareholdings) Act 1998 (the Act) outlines the process for approving or revoking stakes in financial sector companies. Section 13 of the Act allows individuals or entities to apply for approval to hold a stake in a financial sector company. Once an application is made, the Treasurer has the authority to grant or deny this approval under section 14 of the Act. In this case, the applicants named in Schedule 1 have applied for approval to hold a 100% stake in the financial sector companies listed in Schedule 2. Under section 14(1), the Treasurer is satisfied that it is in the national interest to grant these applicants approval, while under section 18(3), the existing approval holders named in Schedule 3 have requested their approval be revoked once the applicants receive their approval. The Act imposes several obligations on the parties involved. For applicants, this means they must apply for and receive approval before holding a stake in a financial sector company. For existing approval holders, they must request the revocation of their approval if it is in the national interest to do so, as has been requested in this case. The Treasurer, who is empowered under sections 14 and 18, must give written notice of any approval granted or revoked and publish a copy of this notice in the Gazette, as stipulated in section 16. Additionally, the Treasurer can impose or vary conditions on approvals under section 16(2) and may vary the percentage specified in an approval under section 17(6). Failure to comply with the Act can lead to significant consequences. Section 11 of the Act outlines that an unacceptable shareholding situation occurs if an individual or entity acquires shares in a financial sector company in a way that creates or increases an unacceptable shareholding situation. If such acquisition is done recklessly, the individual or entity can be guilty of an offence. The maximum penalty for an individual is 400 penalty units, while for a body corporate, it is 2,000 penalty units. Section 32(3) further allows the Federal Court to grant an injunction against anyone contravening a condition of an approval. These provisions ensure compliance with the Act's requirements and maintain the integrity of the financial sector.

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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.