Public Finance (Mixed Ownership Model) Amendment Act 2012

1: Title
This Act is the Public Finance (Mixed Ownership Model) Amendment Act 2012
2: Commencement
This Act comes into force on the day after the date on which it receives the Royal assent. Amendments to Public Finance Act 1989
3: Amendments to Public Finance Act 1989
Sections 4 to 10 Public Finance Act 1989 2012-06-30 Public Finance Act 1989
4: Section 1A amended (Purpose)
After section 1A(2)(e)
ea: places limits on the ownership of the companies named in Schedule 5 .
5: Section 2 amended (Interpretation)
In section 2(1) mixed ownership model company section 45P .
6: New sections 3B and 3C inserted
After section 3A
3B: Power to amend Schedule 5 to reflect name changes
The Governor-General may, by Order in Council, amend Schedule 5
3C: Power to amend Schedule 5 to restore company to State-Owned Enterprises Act 1986
1: The Governor-General may, by Order in Council, repeal the name of a company from Schedule 5
2: Every Order in Council made under subsection (1)
a: insert the name of that company in Part 2 of Schedule 1 of the Ombudsmen Act 1975; and
b: repeal the name of that company from Part B Schedule 36 Part A
3: An Order in Council may be made under this section only if the Governor-General in Council is satisfied, at the time of the making of the Order in Council, that 100% of the issued ordinary shares in the company are held by Ministers of the Crown on behalf of the Crown.
7: Section 4 amended (Expenses or capital expenditure must not be incurred unless in accordance with appropriation or statutory authority)
After section 4(2)(b)(ii)
iia: a mixed ownership model company listed in Schedule 5 .
8: Section 27 amended (Annual financial statements of Government)
In section 27(3)
ba: all mixed ownership model companies listed in Schedule 5 .
9: New Part 5A inserted
After Part 5
5A: Mixed ownership model companies
Preliminary provisions
45P: Definitions of mixed ownership model company and other terms
1: In this Act, mixed ownership model company Schedule 5
2: In this Part,— 10% limit section 45S Crown excess securities FMA relevant interest security voting right section 45T(1)(c)
a: during a period in which a payment or distribution (or part of a payment or distribution) in respect of the security that confers the voting right is in arrears or some other default exists:
b: on a proposal that affects rights attached to the security that confers the voting right:
c: on a proposal to put the company into liquidation:
d: during the liquidation of the company:
e: in respect of a special, immaterial, or remote matter that is inconsequential to control of the company voting security
45Q: Treaty of Waitangi (Te Tiriti o Waitangi)
1: Nothing in this Part shall permit the Crown to act in a manner that is inconsistent with the principles of the Treaty of Waitangi (Te Tiriti o Waitangi).
2: For the avoidance of doubt, subsection (1) 1986 No 124 s 9 51% Crown control
45R: Restriction on reduction of the Crown's holding below 51% control
1: No Minister who is a shareholder in a mixed ownership model company may take any of the following actions if it would result in the Crown having less than 51% control of the company:
a: sell or otherwise dispose of any shares in, or voting securities of, the company held in the Minister's name:
b: permit shares in, or voting securities of, the company to be allotted or issued to any person.
2: A mixed ownership model company must not issue, acquire, or redeem shares in, or voting securities of, the company if the issue, acquisition, or redemption would result in the Crown having less than 51% control of the company.
3: An issue, acquisition, or redemption of shares or voting securities is invalid and of no effect to the extent that it breaches subsection (2)
4: The Crown has less than 51% control of a mixed ownership model company, for the purposes of this section, if the Crown holds less than—
a: 51% of any class of issued shares in the company; or
b: 51% of any class of voting securities of the company. 10% limit
45S: 10% limit on holdings by persons other than the Crown
1: No person (other than the Crown) may have a relevant interest in shares in, or voting securities of, a mixed ownership model company that comprise more than—
a: 10% of a class of issued shares in the company; or
b: 10% of a class of voting securities of the company.
2: In this Part, 10% limit
3: Subsection (1) section 45U
45T: Effect of exceeding 10% limit
1: Every person who contravenes section 45S
a: comply with any written notice that the person receives from the mixed ownership model company requiring that the person sell or otherwise dispose of interests in excess securities of the company, or take any other steps that are specified, for the purpose of ensuring that the 10% limit is not exceeded; and
b: without limiting paragraph (a)
c: while the person contravenes that section, not exercise or control the exercise of the voting rights attaching to the excess securities.
2: A person has no right to be paid a dividend or other distribution in respect of the excess securities (despite the Companies Act 1993).
3: An exercise of a voting right in contravention of subsection (1)(c)
4: However, subsections (1)(c) and (3) subsection (1)(c)
5: Nothing in section 45S 1988 No 234 s 36U
45U: Exemption from 10% limit for trustee corporations and nominee companies, etc
1: A person ( A section 45S
a: A complies with both of the following subparagraphs:
i: A exceeds the 10% limit merely because A holds securities on behalf of another person in the ordinary course of business as a trustee corporation or nominee company; and
ii: section 31(1)(b) of the Securities Markets Act 1988 currently applies to A (and so exempts A as a trustee corporation or a nominee company under that Act); or
b: A exceeds the 10% limit merely because A is attributed with (under section 5B of the Securities Markets Act 1988) the relevant interests of another person who is exempt from the 10% limit under paragraph (a)
2: A person to whom subsection (1)(a)
a: keep under continuing review the transactions of all persons for whom A holds securities of the mixed ownership model company in A's name; and
b: inform the mixed ownership model company if any of those persons exceeds the 10% limit.
3: The exemption under this section does not apply to a person who is currently designated under section 45V 1988 No 234 ss 31–32A
45V: Power of FMA to remove exemption from 10% limit for trustee corporations, nominee companies, etc
1: The FMA may, by notice in the Gazette section 45U
a: the person has not complied with the condition in section 45U(2)
b: the exemption is being used for the purpose or purposes of circumventing, evading, or defeating the operation of the 10% limit taking into account the nature, substance, and economic effect of the interest or relationship or other facts (and not the mere form).
2: The FMA may, by notice in the Gazette
3: A notice under this section takes effect from the date stated in the notice (which must not be earlier than the date of the Gazette
4: Before designating a person as no longer exempt, the FMA must—
a: do everything reasonably possible on its part to advise the person of the proposed designation; and
b: give the person a reasonable opportunity to make submissions to the FMA on the proposal.
5: Subsection (4)
6: Failure to comply with subsection (4) 1988 No 234 ss 48C, 48D Continuing application of certain provisions
45W: Certain provisions of State-Owned Enterprises Act 1986 and other enactments continue to apply
1: Sections 22 to 30(1) of the State-Owned Enterprises Act 1986, the provisions listed in subsection (2)
a: the company were a State enterprise and a company named in Schedule 2 of the State-Owned Enterprises Act 1986; and
b: the Minister of Finance and the Minister responsible for that company were the shareholding Ministers for the company.
2: The provisions are—
a: the definition of State forest land in section 2(1) and sections 24(1) and (6), 24B(4) to (6), and 61(2) of the Conservation Act 1987:
b: section 11 of the Crown Pastoral Land Act 1998:
c: sections 8A to 8H of the Treaty of Waitangi Act 1975. 1998 No 99 s 3(2), (4) .
10: New Schedule 5 inserted
After Schedule 4 Schedule 5 Schedule 1 Amendments to other enactments
11: Amendments to other enactments
Amend the enactments specified in Schedule 2 2012-06-30 Electricity Act 1992 Employment Relations Act 2000 Finance Act (No 2) 1988 Financial Markets Authority Act 2011 Income Tax Act 2007 Land Act 1948 Manapouri-Te Anau Development Act 1963 Maori Purposes Act 1959 Ngāi Tahu Claims Settlement Act 1998 Public Audit Act 2001 Public Records Act 2005 Public Works Act 1981 Waikato-Tainui Raupatu Claims (Waikato River) Settlement Act 2010