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%

Administered by Department of the Treasury

Legislation au C2019G00446 In force Gazette

Legislation content

 

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.

Overview

The Financial Sector (Shareholdings) Act 1998 was enacted to address the need for regulation and oversight of shareholdings in the financial sector, particularly in relation to authorised deposit-taking institutions and authorised insurance companies. The Act was introduced to ensure that significant shareholdings in these entities do not lead to unacceptable situations that could potentially compromise the stability and integrity of the financial system. This legislation is overseen by the Australian Parliament, with the Treasurer exercising specific powers under the Act, such as granting or revoking approvals for significant shareholdings, imposing conditions, and varying the percentage of allowable stakes. The policy objective of the Act is to maintain financial stability by preventing unacceptable shareholding situations that could pose risks to the financial system. The Act empowers the Treasurer to approve, condition, vary, or revoke approvals for holding stakes in financial sector companies, and to take action against those who engage in prohibited conduct. The Act also provides for offences and penalties for reckless acquisitions of shares that lead to unacceptable shareholding situations. The Financial Sector (Shareholdings) Act 1998 is thus a crucial legislative instrument in safeguarding the financial sector's stability by regulating significant shareholdings and ensuring compliance with the established conditions and standards.

Scope and Application

The Financial Sector (Shareholdings) Act 1998 applies to individuals or entities seeking to hold a significant stake in a financial sector company, with particular attention to shareholdings exceeding 15%. The Act pertains to the Commonwealth of Australia and regulates the approval process for such significant shareholdings. It mandates that any person or group of persons seeking to acquire a stake in a financial sector company must obtain the Treasurer's approval. This Act applies to the acquisition of shares in authorised deposit-taking institutions or authorised insurance companies, effectively covering a broad spectrum of financial entities. The Act also allows for the imposition of conditions, variations, and revocation of approvals by the Treasurer, either on the Treasurer's own initiative or in response to an application. Furthermore, it extends its reach to include flow-on approvals for holding stakes in companies that are 100% subsidiaries of approved holding companies. The Act does not explicitly state exclusions, but its focus is primarily on the prevention of unacceptable shareholding situations that could potentially threaten the stability and integrity of the financial sector.

Key Provisions

The main operative sections of the Financial Sector (Shareholdings) Act 1998 (the Act) in this instrument include subsection 18(3) which allows the delegate of the Treasurer to revoke existing approvals to hold a stake in a financial sector company of more than 15%, and subsection 14(1) which allows the delegate to approve such stakes. The Act provides that the delegate has the authority to revoke the 2013 Approval (subsection 18(3)) and the 2018 Approval (subsection 18(3)), and subsequently approve the applicants to hold a 100% stake in PIIPL, BAH, and BI (subsection 14(1)). This instrument will come into force from the date BAH becomes a holding company of PIIPL and will remain in force indefinitely. The Act imposes several obligations on parties and entities it governs, such as the requirement for applicants to apply to the Treasurer for approval to hold a stake in a financial sector company of more than 15% (subsection 13). It also allows the Treasurer to impose conditions or further conditions on an Approval under section 14 (subsection 16(2)(a)) and to revoke or vary any conditions imposed under subsection 16(2) of the Act or specified in the Notice of Approval (subsection 16(2)(b)). Additionally, the Act allows a person who holds an Approval under section 14 to apply to the Treasurer to vary the percentage specified in the Approval (subsection 17(1)). Under the Act, there are offences and penalties for breach, particularly in relation to unacceptable shareholding situations. Section 11 of the Act makes it an offence for a person or 2 or more persons under an arrangement to acquire shares in a company if the acquisition results in an unacceptable shareholding situation, or if such a situation already exists and the person increases their stake in the company. The maximum penalty for such an offence is 400 penalty units or, for a body corporate, 2,000 penalty units (subsection 4B(3) of the Crimes Act 1914). Additionally, if a person has engaged or is proposing to engage in 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 to restrain the person from engaging in the conduct (subsection 32(3) of the Act).

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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.