Worth Richard: Companies (Minority Buy-out Rights) Amendment Bill — Second Reading In Committee Third Reading 
Text is incorporated into the Bound Volume 
Worth Richard: Companies (Minority Buy-out Rights) Amendment Bill — Second Reading In Committee Third Reading 
[Sitting date: 02 September 2008. Volume:649;Page:18535. Text is incorporated into the Bound Volume.] 
Dr RICHARD WORTH (National) 
: 
 Eight years after a judge highlighted the substantial flaws of the Companies Act in dealing with minority buy-outs and called for an urgent remedy the Government has settled on a solution. Eight years is a long time. Eight years is a long time for an injustice to roll on so it is good that after that passage of time decisive action has been taken that National supports. The National Party has been very actively involved. Its members including the Commerce Committee’s esteemed chairman participated very fully in the committee’s deliberations on this legislation. 
What spurred all this legislation was what happened in a case—as Mr Swain has said—touching Infratil. Infratil was the first minority shareholder to invoke minority buy-out provisions in order to force the Natural Gas Corporation to buy its 6.7 percent stake in the corporation after it opposed the corporation’s $824 million takeover of the energy retailer TransAlta. Infratil was unhappy with the $1.30 provisional price set by the Natural Gas Corporation but after the company sought a declaratory judgment in order to get control of the Infratil shares Infratil was forced to hand over title and the price was later set at $1.68 after protracted arbitration. At that time Justice Doogue who was the trial judge in connection with the litigation criticised the statutory vacuum and said that the relevant section of the Act was “substantially flawed”—that was the phrase he used—and should be considered urgently. 
A number of issues emerged from that case and we have discussed them in the course of these parliamentary processes. There were issues around timing around valuation information and transaction enforcement and also around compensation. Either the Act was short on detail or alternatively the issue was missing from the Act. So it is right to say that the Law Commission reached a proper view in concluding that the bones of the law needed some flesh and that is what we are seeing today. National commends the bill. We look forward to its further passage by way of the Royal assent. 
I note one thing of perhaps passing interest and that is that the commencement clause provides that “This Act comes into force on the day after the date on which it receives the Royal assent.” If I look at the other bills that are on the Table and being dealt with in urgency I note that the Electricity Industry Reform Amendment Bill comes into force on the 28th day after the date on which it receives the Royal assent and the Family Courts Matters Bill comes into force on a date to be appointed by the Governor-General by Order in Council. It seems to be very much a preference of individual parliamentary counsel as to what may or may not be an appropriate commencement date. Surely there is a case for a greater element of consistency on the issue of when legislation is to strike New Zealanders and affect them.