Document ID: chunk:federal_register_of_legislation:C2006C00145:clause:2_13c:p1
Version: federal_register_of_legislation:C2006C00145
Segment Type: clause
Provision Reference: sch 2 cl 13C (pt 1/2)
Character Range: 71296–74073

13C  ADI statutory managers—termination of control

Conditions necessary for termination of control

 (1) If APRA assumes control of an ADI's business or appoints an administrator of an ADI's business, APRA must ensure that either it or an administrator of the ADI's business has control of the ADI's business until:
 (a) the following conditions are satisfied:
 (i) the ADI's deposit liabilities in Australia have been repaid or APRA is satisfied that suitable provision has been made for their repayment; and
 (ii) APRA considers that it is no longer necessary for it or an administrator to remain in control of the ADI's business; or
 (b) APRA considers that the ADI is insolvent and is unlikely to be returned to solvency within a reasonable time, and APRA has applied for the ADI to be wound up under the Corporations Law (see section 14F).
A termination of control that is permitted under this section is called an ultimate termination of control.

Note: This provision does not prevent a change, or changes, between control of an ADI's business by APRA and an administrator or between administrators.

Events to precede termination

 (2) Before making an ultimate termination of control by an ADI statutory manager of an ADI's business, APRA must:
 (a) ensure that directors of the ADI have been appointed or elected under the ADI's constitution at a meeting called by the ADI statutory manager in accordance with the ADI's constitution; or
 (b) appoint directors of the ADI by instrument in writing; or
 (c) ensure that a liquidator for the ADI has been appointed.

Power to terminate control

 (3) If the requirements in subsections (1) and (2) are satisfied, APRA may by instrument in writing make an ultimate termination of control of an ADI's business by an ADI statutory manager.

 (4) If the ADI statutory manager at the time of the termination is an administrator, the instrument of termination also operates as a termination of the appointment of the administrator. A copy of the instrument must be given to the administrator. However, mere failure to give the copy to the administrator does not affect the termination of the appointment.

Period of director's appointment

 (5) If a director is elected or appointed under subsection (2), the director takes office on the termination of the ADI statutory manager's control of the ADI's business. If the director was appointed by APRA, the director holds office until the ADI's next annual general meeting, subject to any terms and conditions imposed by APRA on the director's appointment. If the director was appointed or elected under the ADI's constitution, the constitution governs the appointment.

Note: For further information about what happens when an ADI statutory manager is in control of an ADI's