Revocation of existing approval and granting of new approval to hold a stake in a financial sector company of more than 15% - Auto & General Insurance Company Limited

Administered by Department of the Treasury

Legislation au C2015G00455 In force Gazette

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Revocation 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: BHL Holdings Limited (Guernsey) (BHL) and the person(s) named as its associates in Schedule 1 and Schedule 2.

 

SINCE

 

  1. BHL and the persons named as its associates in Schedule 1 (the existing Approval holders) hold an approval dated 9 December 2013 (the existing Approval) under subsection 14(1) of the Financial Sector (Shareholdings) Act 1998 (the Act), to hold a stake of 100% in Auto & General Insurance Company Limited ACN 111 586 353 (the Company), a financial sector company under the Act;

 

B.                 The existing Approval holders have requested the existing Approval be revoked;

 

C.                 BHL and the persons named as its associates in Schedule 2 (the applicants) have applied for  approval under section 13 of the Act, to hold a stake of 100% in the Company; and

 

D.                 I am satisfied it is in the national interest to approve the applicants holding a stake in the Company of 100%.

 

I, Brandon Kong Leong Khoo, a delegate of the Treasurer, under subsection 18(3) of the Act, REVOKE the existing Approval, and under subsection 14(1) of the Act, APPROVE the applicants holding a stake in the Company of 100%.

This instrument comes into force on the date it is signed. The Approval under the instrument remains in force indefinitely.

 

 

 

Dated: 25 March 2015

 

[Signed]

 

Brandon Kong Leong Khoo

Executive General Manager

Specialised Institutions Division

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 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 applicant 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

ASSOCIATES OF BHL HOLDINGS LIMITED (GUERNSEY)

Companies Incorporated in Australia:

Auto & General Holdings Pty Ltd ACN 086 321 459 

Auto & General Services Pty Ltd ACN 099 707 801 

Direct Insurance Systems Company Pty Ltd ACN 003 617 909 

Budget Direct Insurance Agency Pty Ltd ACN 086 321 422 

Auto & General Insurance Services Pty Ltd ACN 094 408 483 

Auto & General Training Pty Ltd ACN 089 508 583 

Budget Insurance Brokers Pty Ltd ACN 089 508 547 

Budget Direct Insurance Brokers Pty Ltd ACN 088 124 627 

Retirease Insurance Agency Pty Ltd ACN 094 425 233

Financial Holdings Australia Pty Ltd ACN 112 971 132 

Compare the Market Pty Ltd ACN 117 323 378

Bennett’s Motorcycle Insurance Company Ltd ACN 112 121 838

Affinisure Pty Ltd ACN 128 885 469

Ibuyeco Pty Ltd ACN 127 997 175

Klinkert Investments Pty Ltd ACN 086 314 285

 

Companies Incorporated in the British Virgin Isles: 

Jacamar Overseas Ltd

Companies Incorporated in Gibraltar: 

Coral Underwriting Limited

Companies incorporated in Guernsey:

Reef Holdings Limited

R&H Trust Co. (Guernsey) Ltd

Maitland Trustees Limited (formerly Credit Suisse Trust Ltd)

Reef Management Services Limited

BHL Management Services Limited

Jacana Re Limited

BHL Europe Holding Limited

Investor 20:25 Limited

BHL Minorities Limited

The Reef Foundation

 

Companies Incorporated in South Africa: 

 

Telesure Investment Holdings (Pty) Ltd 

Dial Direct Insurance Ltd 

Auto & General Insurance Company Ltd 

Napier Gardens (Pty) Ltd 

Budget Insurance Brokers (Pty) Ltd

Upstream Advertising (Pty) Ltd

First For Women Insurance Brokers (Pty) Ltd 

Motowise (Pty) Ltd 

Douw Steyn Properties (Pty) Ltd 

Direct Integrated Systems Corporation (SA) (Pty) Ltd 

No. 1 Queen Road Property (Pty) Ltd

Budget Insurance Company Ltd 

Firstprize Solutions (Pty) ltd

1 Life Direct Insurance Ltd

Saxon Hotel (Pty) Ltd

Contact Financial Services (Pty) Ltd

Your Home Loan (Pty) Ltd

Telesure Financial Services (Pty) Ltd

OneCall Insurance Brokers (Pty) Ltd

Business Asset Rental (Pty) Ltd

Telesure Group Services (Pty) Ltd 

 

Companies Incorporated in the United Kingdom:

Budget Group Ltd

Budget Insurance Company Ltd 

Direct Insurance Systems Corporation Ltd  

BFSL Ltd 

ACM ULR Ltd 

BISL Ltd 

Budget Retail Ltd 

Fusion Contact Centre Services Ltd 

Budget Commercial Insurance Services Ltd

Bakewell Property Development Ltd

Budget Financial Services Ltd

Budget Insurance Intermediaries Ltd

GF Bennett (Holdings) Ltd

Budget Group Ltd

Dial Direct Insurance Marketing Ltd

Dial Direct Finance Ltd

Pratt’s Insurance Office

IGO ECO Ltd

Budget Insurance Services Ltd

Courtanet SAS

Verzekeringssite

Coral Administration Services Limited

BGL Direct Life Ltd

Minster Law Limited

BHL (UK) Holdings Limited

 

 

SCHEDULE 2

 

ASSOCIATES OF BHL HOLDINGS LIMITED (GUERNSEY) WHO HOLD A DIRECT CONTROL INTEREST IN THE COMPANY

 

Jacamar Overseas Ltd (British Virgin Isles)

Klinkert Investments Pty Ltd ACN 086 314 285

Ram Kangatharan


Overview

The Financial Sector (Shareholdings) Act 1998 was enacted to regulate shareholdings in financial sector companies to ensure the stability and integrity of the financial system. The Act was introduced to address the problem of potentially risky concentrations of ownership in the financial sector, which could threaten the national economy. Enacted by the Parliament of Australia, the policy objective of the Act is to maintain the soundness of the financial sector by preventing unacceptable shareholding situations. The Act allows the Treasurer to approve or impose conditions on shareholdings in financial sector companies, and in this case, the existing approval for BHL Holdings Limited (Guernsey) and its associates to hold a 100% stake in Auto & General Insurance Company Limited has been revoked, with a new approval granted under specific conditions to ensure that it remains in the national interest. The revocation and subsequent approval process is overseen by a delegate of the Treasurer, who exercises their powers under the Act to manage and regulate shareholdings that could affect the financial sector's stability. This legislative instrument ensures that any changes in shareholding structures are closely monitored and controlled to safeguard Australia's financial interests.

Scope and Application

The Financial Sector (Shareholdings) Act 1998 applies to the regulation of shareholdings in financial sector companies, ensuring that entities holding significant stakes in these companies meet certain national security and financial stability criteria. The Act applies to BHL Holdings Limited (Guernsey) (BHL) and the persons named as its associates in Schedule 1 and Schedule 2, who hold or are seeking to hold an approval to maintain a stake in a financial sector company. The approval process involves the Treasurer, who may impose conditions, vary the percentage of the stake, or revoke the approval if deemed necessary for national interest. This legislation has a national reach as it is a Commonwealth Act and applies across Australia. The Act includes provisions for subordinate instruments to extend or restrict its application, such as imposing conditions on approvals or varying the percentage of stakes. Certain exclusions and exemptions may apply based on specific conditions and circumstances, but these are subject to the Treasurer’s discretion and the national interest considerations.

Key Provisions

The main operative sections of the instrument under the Financial Sector (Shareholdings) Act 1998 (the Act) include the revocation of an existing approval under subsection 18(1) of the Act, and the granting of a new approval under subsection 14(1) of the Act. Specifically, the existing approval held by BHL Holdings Limited (Guernsey) (BHL) and its associates to hold a 100% stake in Auto & General Insurance Company Limited ACN 111 586 353, a financial sector company, is revoked. Simultaneously, a new approval is granted to BHL and its new associates to also hold a 100% stake in the Company. This new approval is considered to be in the national interest, as stated by the delegate of the Treasurer, Brandon Kong Leong Khoo. The Act imposes several obligations and requirements on the parties involved. Firstly, BHL and its associates must adhere to any conditions imposed by the Treasurer on their approval, as outlined in subsection 16(2) of the Act. These conditions can be imposed on the Treasurer's own initiative or in response to an application by the approval holder. Additionally, the new approval holders must notify the Treasurer if they wish to vary the percentage of their shareholding, as stipulated in subsection 17(1) of the Act. The Treasurer also retains the authority to vary the percentage of shareholding on their own initiative if deemed to be in the national interest, under subsection 17(6) of the Act. Failure to comply with the Act's provisions may result in various civil and criminal consequences. For instance, if a person or group of persons acquires shares in a company and, as a result, an unacceptable shareholding situation arises or is exacerbated, they may be found guilty of an offence under section 11 of the Act. This offence is considered indictable, with a maximum penalty of 400 penalty units for individuals and 2,000 penalty units for bodies corporate. Furthermore, under section 32(3) of the Act, the Federal Court can grant an injunction to restrain a person from engaging in conduct that contravenes a condition to which an approval is subject. The court can also require the person to take specific actions if it deems it desirable to do so.

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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.