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
SINCE
- General Electric (New York), together with a number of its associates, was granted approval on 2 September 2015 under section 14 of the Financial Sector (Shareholdings) Act 1998 (the Act) to hold a stake of 100% in a number of its 100% subsidiaries, financial sector companies under the Act (the existing approval);
B. The 100% subsidiaries included the authorised insurance companies Hallmark Life Insurance Company Ltd. ABN 87 008 446 884 and Hallmark General Insurance Company Ltd. ABN 82 008 477 647 (the Hallmark companies);
C. The General Electric group is carrying out a group restructure and wishes to dispose of its interests in the Hallmark companies to KVD Australia Pty Ltd ABN 37 604 634 157 (the disposal);
D. General Electric (New York) and its associates have requested under subsection 18(3) of the Act that the existing approval be revoked from the time the disposal is completed;
E. KVD Australia Pty Ltd ABN 37 604 634 157 and the persons specified in Schedule 1 have applied under section 13 of the Act to hold a stake in excess of 15% in:
- the Hallmark companies and each of GE Capital Finance Australia Holdings Pty Ltd ABN 46 603 161 100 and GE Personal Finance Pty Ltd ABN 54 008 443 810 (holding companies of the Hallmark companies); and
b. KVD Singapore Pte. Ltd. (Singapore), KVD Australia Holdco Pty Ltd ABN 83 604 747 391 and KVD Australia Pty Ltd ABN 37 604 634 157 (which will become holding companies of the Hallmark companies and therefore financial sector companies from the time, if any, the disposal is completed)
from the time, if any, the disposal is completed; and
F. I am satisfied it is in the national interest to approve KVD Australia Pty Ltd ABN 37 604 634 157 and the persons specified in Schedule 1 holding the proposed stakes;
I, Adrian Rees, a delegate of the Treasurer, under:
(i) subsection 18(3) of the Act, REVOKE the existing approval;
(ii) subsection 14(1) of the Act, APPROVE KVD Australia Pty Ltd ABN 37 604 634 157 and the persons specified in Schedule 1 to each hold a stake of up to 100% in:
- the Hallmark companies and each of GE Capital Finance Australia Holdings Pty Ltd ABN 46 603 161 100 and GE Personal Finance Pty Ltd ABN 54 008 443 810; and
b. KVD Singapore Pte. Ltd. (Singapore), KVD Australia Holdco Pty Ltd ABN 83 604 747 391 and KVD Australia Pty Ltd ABN 37 604 634 157; and
(iii) subsection 16(1) of the Act IMPOSE the conditions in Schedule 2 to which the approval is subject.
This instrument comes into force from the time the disposal is completed, provided this is before 31 December 2015.
Dated 02 November 2015
[Signed]
Adrian Rees
General Manager
Diversified Institutions Division
Interpretation
In this Notice:
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.
100% subsidiary 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 KVD Australia Pty Ltd ABN 37 604 634 157 who have applied for an approval:
(a) Deutsche Bank Aktiengesellschaft ABN 13 064 165 162
(b) Vatpo Investments Pte. Ltd. (Singapore)
(c) KKR Clarendon Holdings L.P. (Delaware, USA)
(d) KKR Asia II Fund Investments Pte. Ltd. (Singapore)
(e) KKR Asia ESC Pte. Ltd. (Singapore)
(f) KKR Asia II SBS Pte. Ltd. (Singapore)
(g) KVD Singapore Pte. Ltd. (Singapore)
(h) KVD Australia Holdco Pty Ltd ABN 83 604 747 391
(i) GE Capital Finance Australia Holdings Pty Ltd ABN 46 603 161 100
(j) GE Personal Finance Pty Ltd ABN 54 008 443 810
(k) Hallmark Life Insurance Company Ltd. ABN 87 008 446 884 (in respect of Hallmark General Insurance Company Ltd. ABN 82 008 477 647 only)
SCHEDULE 2
The conditions to which the approval is subject are:
(1) The direct control interest held by Deutsche Bank Aktiengesellschaft ABN 13 064 165 162 in KVD Singapore Pte. Ltd. (Singapore) must at all times remain below 50%;
(2) The direct control interest held by Vatpo Investments Pte. Ltd. (Singapore) in KVD Singapore Pte. Ltd. (Singapore) must at all times remain below 50%; and
(3) The direct control interest held by KKR Clarendon Holdings L.P. (Delaware, USA) in KVD Singapore Pte. Ltd. (Singapore) must at all times remain below 50%.
direct control interest has the meaning given in clause 11 of Schedule 1 to the Act