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

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

Approval to hold a stake in a financial sector company of more than 15%

Financial Sector (Shareholdings) Act 1998

To: HFT (2017) Limited (New Zealand) as trustee for the Hogan Family (NZ) Trust (HFT) and the persons named in Schedule 1 (the Schedule 1 Persons)

SINCE

1. HFT and the Schedule 1 Persons (the Applicants) have applied to the Treasurer under section 13 of the Financial Sector (Shareholdings) Act 1998 (the Act) for approval to hold a 100% stake in Pacific International Insurance Pty Limited ABN 83 169 311 193 (PIIPL) and each of its holding companies Badger Australia Holdings Pty Ltd ABN 43 627 251 889 (BAH) and Badger International (NZ) LP (BI)

B.     On 14 June 2013, APRA granted approval under subsection 14(1) of the Act for the persons named in Schedule 2 (the 2013 Applicants) to hold a 100% stake in PIIPL (the 2013 Approval);

C.     The 2013 Applicants have requested that the 2013 Approval be revoked from the time, if any, the approvals referred to in Recital A above are granted;

D.     On 7 May 2018, APRA granted approval under subsection 14(1) of the Act for the persons named in Schedule 3 (the 2018 Applicants) to hold a 100% stake in PIIPL and each of PIIPL’s then holding companies, BI, Gramar Family Holdings Pty Ltd ABN 88 159 172 451 (Gramar) and Rapid Solutions Holdings Pty Ltd ABN 33 159 178 775 (RSH) (the 2018 Approval);

E.     The 2018 Applicants have requested that the 2018 Approval be revoked from the time, if any, the approvals in A are granted;

F.      BAH and PIIPL are participating in a group restructure that will result in a change in the ownership and control of PIIPL (the Restructure);

G.    Under the Restructure, Gramar and RSH will be deregistered, BAH will become a holding company of PIIPL and BI will become a holding company of BAH;

H.     I am satisfied that it is in the national interest to approve the Applicants to hold a 100% stake in PIIPL, BAH and BI;

I, Louis Serret, a delegate of the Treasurer:

(a)   under subsection 18(3) of the Act, REVOKE the 2013 Approval;

(b)   under subsection 18(3) of the Act, REVOKE the 2018 Approval; and

(c) under subsection 14(1) of the Act, APPROVE the Applicants to hold a 100% stake in each of PIIPL, BAH and BI.

This instrument comes into force from the date on which BAH becomes a holding company of PIIPL and remains in force indefinitely.

Dated 30 April 2019

[Signe]

………………………

Louis Serret

General Manager

Specialised Institutions Division

Schedule 1 – the Schedule 1 Persons

1. Badger Mutual Wealth (Pty) Ltd
2. Badger International (Pty) Ltd
3. Badger International (NZ) LP
4. Badger Australia Holdings Pty Ltd ABN 43 627 251 889
5. Brad Howard Hogan
6. Lindsay McKinnon Hogan
7. Phillip de Jager

Schedule 2 – the 2013 Applicants

1. Rapid Solutions Holdings Pty Ltd ABN 33 159 178 775
2. Gramar Family Holdings ABN 88 159 172 451
3. Graham Hellier
4. Marilyn Hellier
5. Murray Hellier

Schedule 3 – the 2018 Applicants

1. Badger International (Pty) Limited
2. Badger International (NZ) LP (New Zealand)
3. Badger GP Limited (New Zealand)
4. HFT (2017) Limited (New Zealand) as trustee for the Hogan Family (NZ) Trust
5. Badger Mutual Wealth (Pty) Ltd (South Africa)
6. Brad Howard Hogan
7. Lindsay McKinnon Hogan
8. Phillip de Jager

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

if in the court’s opinion, it is desirable to do so, requiring the person to do something.