Allan KiritapuCOMPANIES (CLARIFICATION OF DIVIDEND RULES IN COMPANIES) AMENDMENT BILLSecond ReadingDebate resumed.KIRITAPU ALLAN (Labour): If I may I want to commence my remarks in the House this evening on this bill the Companies (Clarification of Dividend Rules in Companies) Amendment Bill by commending the member to which this bill is named under Mr Todd Muller. Mr Muller brought this bill to our select committee and it has been worked up through the primary production select committee. He identified a niche as he said in the companies law which has caused some issue and in particular for one of our largest horticultural companies Zespri in particular in the way that they wanted to structure themselves with regards to their wet and their dry shares.That was the origin in terms of where the idea for this bill comes from. I want to acknowledge the way that Mr Muller has worked with our side of the House. I too want to acknowledge the advice that he drew on from Mr Goddard QC who's spending some time offshore actually and made time to provide us with a memorandum answering our questions. Of particular concern to me was yes whilst there had been an issue identified was there sufficient cause to make amendments to the Companies Act to tidy this piece of law that had been a matter of academic debate and as my colleague across the House has said had caused much consternation in terms of changing structures at various times for companies like Zespri?We called for submissions in respect of this bill; we received four. One of the driving questions—and I want to acknowledge the work of those that came and advised us from the Ministry for Primary Industries—one of our constant questions to them was Can you please explain to us the nature and the gravity of how significant this issue is and for how many companies?". Because if we are amending the Companies Act and we're amending that—well we're seeking to clarify the conflict between section 36 and section 53—if we do incorporate some legislative amendment as is set out in this amendment bill before us will we be opening a Pandora 's box? Can we anticipate the unintended consequences? And does the risk justify the means? We've been working diligently with the members opposite and across this side of the House. As those discussions have gone on I guess the issue that we have to balance as a Government is if we make these amendments if we open up that Pandora's box does it justify the cost does it justify the time if we were to make such an amendment?I want to again acknowledge the stewardship of Mr Muller. He has been dignified in the way that he's worked with us. He has drawn on his personal experience as a senior manager at one of these large companies. They've had to deal with this particular issue in practice. He has drawn on experts in the field. They've given us their time. So I cannot fault the work of the member in any way shape or form. But the challenge for us on this side of the House has been to find the breadth and to understand the nature of this issue beyond the particular for example circumstance of Zespri which was very unique.What they did there at that time and the member who has championed this bill will know is that they found a workaround. This is essentially the conflict. It's quite hard to find any academic articles it's hard to find any case law in respect of just how large this tension is but there are a couple of quips. For us we went "Well how many other companies are really in this position?" and we put out the call if you were. We put out that call to companies and members of the public alike and we were not inundated with submissions that would show us that this was indeed an issue that required our time and energy and would mean that we were making an ad hoc amendment to this companies bill.I'm of the view and I think our side of the House is of the view that there are issues that have been raised. They have warranted our time and we considered that warranted our time in going down and understanding really just what this tension was how costly it was to these companies that had to grapple with finding workarounds where there was a lack of clarity. But I think on this side of the House because it's a niche amendment to the companies bill perhaps it might be more suited to a reform and we'd be looking at a whole reform of the companies bill or making substantive amendments and to work it in with a broader package of reforms. So on this side of the House we support the member's intention to try and clarify the laws and the implications and the practical applications but in this case this side of the House deems that the time and energy to actually make the amendments to the Companies Act in this case don't warrant the investment of the Government's resources. But indeed it doesn't justify more importantly the unknown consequences that might be that might come that might flow through in this particular area. So on those grounds this side of the House will not be supporting the member's bill."