Sharples Pita: Companies (Minority Buy-out Rights) Amendment Bill — First Reading 
Sharples Pita: Companies (Minority Buy-out Rights) Amendment Bill — First Reading 
[Volume:644;Page:13921] 
Dr PITA SHARPLES (Co-Leader—Maori Party) 
: 
 Tena koe Madam Assistant Speaker; tena tatou katoa. The Maori Party comes to this bill aware that many of our whanau hapu and iwi are taking up the company structure as laid out in the Companies Act 1993. Whale Watch Kaikoura Maori active-wear brand Kia Kaha Clothing Mai Media Ltd and Shotover Jet Ltd are all examples of Maori organisations that have been attracted to the company structure as a mechanism for their commercial operations. These international market leaders see the provisions of the Companies Act as providing them with a robust structure for economic benefits to be realised for the capital growth of their assets and to ensure financial benefits go to individual shareholders.  
However we do realise that the company structure may not be appropriate for hapu or iwi whose objectives are solely or primarily political social or cultural. The company structure may not be suitable to meet the non-commercial objectives of whanau hapu and iwi and we recognise that as one of the limitations of the current companies legislation. We take all of these factors and interests into mind when we consider the amendments mooted in this Companies (Minority Buy-out Rights) Amendment Bill.  
This bill seeks to improve buy-out regimes when minority shareholders have elected to have their shares purchased by the company. The current legislation has made it easier to operate as a company with particular attention having been given to decreasing the set-up costs and making name approvals available almost immediately. But issues are still apparent particularly around the concept of minority shareholding.  
From the outset we know that the concept of minority shareholding has always been one of those issues that has turned whanau hapu and iwi off the company structure in the first place. The requirement that those with interests must hold shares has created practical difficulties for hapu and iwi due to the complexity of identifying all the persons to whom the shares should be issued. This bill assumes that hapu and iwi have worked through all of those issues and have come out the other end. In other words in the situation of a dissenting vote minority shareholders have willingly elected to have their shares purchased by the company and the process of this bill is necessary to ensure their shares are valued fairly.  
In general terms the minority buy-out regime is triggered in response to a dissenting vote—that is where the shareholder exercises the votes pertaining to that shareholder's shares against a proposal and that proposal is agreed to by the required majority of shareholders that shareholder is entitled to require the company to purchase those shares in accordance with section 111 of the Companies Act 1993. Both the Law Commission and Justice Doogue concluded that the Companies Act 1993 was actually defective in its failure to set out a workable method when such a situation occurred. Therefore the challenge for this bill is all around how to value minority shareholding when a minority shareholder has elected to have his or her shares purchased by the company under section 111 of the Act. In fact Justice Doogue was so convinced of the failings of this particular legislation that he referred in his 2000 report to a “statutory vacuum” and stated the specific section was “substantially flawed”. We in the Maori Party are therefore pleased to receive this legislation to ensure that the minority buy-out rights are to be both beneficial and workable.  
We do not have a great deal more to add to this debate other than to note with depressing consistency that this bill appears to be another bill before the House in which there has been little if any consultation with Maori. We were unable to confirm what the nature of the consultation with Maori companies or Maori company directors had been in the Law Commission review or if there had been any consultation with Maori in the drafting of this bill. Our experience to date would tell us there has been none. However we will support this bill going to a select committee and we hope that this will provide an opportunity for the independent voice of Maori to be heard. Thank you.