Revocation of existing approval and granting of new approval to hold a stake in a financial sector company of more than 15% - China Minsheng Investment Co. Ltd

Administered by Department of the Treasury

Legislation au C2016G00319 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: China Minsheng Investment Co. Ltd (CMIC) and the person(s) named in the attached Schedule 1 (the applicants); and  

 The persons listed in Schedule 2

 

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:

 

  1. Sirius International Insurance Corporation ABN 26 764 933 001, an authorised insurance company under the Act (the insurer); and
  2. each company which will be both a holding company of the insurer and a 100% subsidiary of the applicant from the time CMIC acquires a 100% stake in the insurer;

 

B.     The persons in Schedule 2 have an approval dated 23 January 2009 under subsection 14(1) of the Act to hold a 100% stake in the insurer:

 

  1. however, from the time CMIC becomes a holding company of the insurer, these persons will not hold a stake in the insurer of more than 15%; and
  2. in the light of a., they have requested that the approval granted to them and their associates be revoked from the time CMIC acquires a 100% stake in the insurer;

 

C.     I am satisfied it is in the national interest to:

 

  1. revoke the approval held by the persons in Schedule 2 to hold a 100% stake in the insurer from the time CMIC acquires a 100% stake in the insurer; and

 

b.      approve each applicant holding a 100% stake in the insurer and each company that will be a holding company of the insurer and a 100% subsidiary of the applicant from the time CMIC acquires a 100% stake in the insurer,

 

I, Louis Serret, a delegate of the Treasurer, under:

 

(a)   subsection 14(1) of the Act, APPROVE each applicant holding a 100% stake in the insurer and a 100% stake in each company that will be a holding company of the insurer and a 100% subsidiary of the applicant from the time CMIC acquires a 100% stake in the insurer; and

 

(b)   subsection 18(3) of the Act, REVOKE the instrument made on 23 January 2009 granting the persons in Schedule 2 and their associates approval to hold a 100% stake in the insurer from the time CMIC acquires a 100% stake in the insurer.

This instrument comes into force from the time CMIC acquires a 100% stake in the insurer. 

Dated 26 February 2016

 

[Signed]

 

Louis Serret

Senior Manager

Specialised 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 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 persons, in addition to CMIC (China), who applied for approval to hold a 100% stake in the insurer

 

1. CM International Holding Pte. Ltd (Singapore)

2. CM Bermuda Ltd. (Bermuda)

3. Sirius International Insurance Group, Ltd. (Bermuda)

4. Sirius International Holdings Ltd. (Bermuda)

5. Sirius International Group, Ltd. (Bermuda)

6. Sirius Bermuda Insurance Company Ltd. (Bermuda)

7. SI Caleta (Gibraltar) Limited (Gibraltar)

8. Sirius Group Holdings (Luxembourg) S.a.r.l (Luxembourg)

9. Sirius Insurance Holding Sweden AB (Sweden)

10. Fund American Holdings AB (Sweden)

 

Note 1: Each of the above companies will be a holding company of the insurer and a 100% subsidiary of each company listed above, if any, whose name is higher on the list at and from the time CMIC acquires a 100% stake in the insurer (e.g. the company listed at 4. above will be a 100% subsidiary of the companies listed 1., 2. and 3. above)

 

Note 2: The place of incorporation of each of the companies in Schedule 1 appears in the brackets after the name of the company  

 

 

SCHEDULE 2 - persons who have an approval dated 23 January 2009 to hold a 100% stake in the insurer whose stake in the insurer will be less than 15% from the time CMIC becomes a holding company of the insurer

 

  1. Lone Tree Holdings Ltd
  2. Lone Tree Insurance Group Ltd
  3. W M Caleta (Gibraltar) Limited
  4. White Mountains Holdings Bermuda Ltd
  5. White Mountains Insurance Group Ltd
  6. White Mountains Re Financial Services Ltd
  7. White Mountains Re Group Ltd
  8. White Mountains Re Holdings Ltd
  9. White Mountains Re Ltd
  10. White Rock Holdings  (Luxembourg) S.a.r.l.
  11. White Sands Holdings (Luxembourg) S.a.r.l

 

 

 

Overview

The Financial Sector (Shareholdings) Act 1998 was enacted to address the potential risks of excessive concentration of ownership in the financial sector, particularly in authorised insurance companies, to safeguard the stability and integrity of the financial system. The Act enables the Treasurer to grant or refuse approval for significant shareholdings in financial sector companies, ensuring that such holdings do not pose unacceptable risks to the national financial system. This legislative framework is crucial for maintaining public confidence in the financial sector. Under the authority of the Act, Louis Serret, a delegate of the Treasurer, has approved applications by China Minsheng Investment Co. Ltd (CMIC) and related entities to hold a 100% stake in Sirius International Insurance Corporation, an authorised insurance company, while revoking the approval for other entities who will hold less than 15% stake in the insurer post-acquisition by CMIC. This decision reflects a policy objective to manage and mitigate potential risks associated with concentrated shareholdings in the financial sector, thereby protecting the national interest.

Scope and Application

The Financial Sector (Shareholdings) Act 1998 applies to entities seeking approval to hold a stake in a financial sector company, specifically in this case, an authorised insurance company. The Act applies to China Minsheng Investment Co. Ltd (CMIC) and the other entities listed in Schedule 1, which are all foreign entities with varying places of incorporation. The Act's jurisdictional reach is national, as it is a Commonwealth Act. The Act allows for the revocation of existing approvals and the granting of new approvals for shareholdings in financial sector companies, with specific conditions and thresholds that may be varied by the Treasurer. The Act also provides for flow-on approvals for holding companies and their subsidiaries. The Act's application may be extended or restricted through subordinate instruments, such as notices imposing conditions or varying percentages specified in an approval. The Act does not specify exclusions or exemptions, but it does outline circumstances under which an approval may be revoked, such as the creation of an unacceptable shareholding situation. The Act also imposes penalties for engaging in conduct that contravenes conditions of an approval.

Key Provisions

Under the Financial Sector (Shareholdings) Act 1998, section 13 allows for applications for approval to hold a stake in a financial sector company. The Act specifies that the approval of stakeholders holding more than 15% in an authorised insurance company is necessary, as per section 14. Additionally, section 18 of the Act allows the Treasurer to revoke approval if it is deemed not to be in the national interest. This legislation revokes the approval held by the persons in Schedule 2 and grants approval to the applicants listed in Schedule 1 to hold a 100% stake in the insurer, Sirius International Insurance Corporation, and each company that will become a holding company of the insurer and a 100% subsidiary of the applicant from the time China Minsheng Investment Co. Ltd (CMIC) acquires a 100% stake in the insurer. The Act imposes specific obligations on the parties it governs. Firstly, it mandates that the applicants must apply for approval under section 13 to hold a 100% stake in the insurer. Secondly, the persons listed in Schedule 2 must request the revocation of their approval to hold a 100% stake in the insurer when CMIC becomes the holding company. Furthermore, the Treasurer must give written notice of this approval to the applicants and the financial sector company concerned and must publish a copy of this notice in the Gazette, as per section 14. The Act also requires the applicants to comply with any conditions or further conditions imposed by the Treasurer under section 16(2) of the Act. Breaching the provisions of this Act may lead to serious consequences. Under section 11 of the Act, any person or group of persons under an arrangement who acquire shares in a company and result in an unacceptable shareholding situation, or increase the stake held by a person in a company if an unacceptable shareholding situation already exists, may be guilty of an offence. If found guilty, they face a maximum penalty of 400 penalty units, or 2,000 penalty units in the case of a body corporate. Moreover, section 32(3) of the Act allows the Federal Court to grant an injunction to restrain any person from engaging in conduct in contravention of a condition to which an approval under section 14 is subject. This includes requiring the person to do something if deemed desirable by the court. Offences under section 11 are considered indictable offences.

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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.