Document ID: chunk:federal_register_of_legislation:F2025C00172:body:0:p14
Version: federal_register_of_legislation:F2025C00172
Segment Type: other
Provision Reference: 
Character Range: 35453–38288

give it power over the investee:
(a) The investor can, without having the contractual right to do so, appoint or approve the investee's key management personnel who have the ability to direct the relevant activities.
(b) The investor can, without having the contractual right to do so, direct the investee to enter into, or can veto any changes to, significant transactions for the benefit of the investor.
(c) The investor can dominate either the nominations process for electing members of the investee's governing body or the obtaining of proxies from other holders of voting rights.
(d) The investee's key management personnel are related parties of the investor (for example, the chief executive officer of the investee and the chief executive officer of the investor are the same person).
(e) The majority of the members of the investee's governing body are related parties of the investor.
B19 Sometimes there will be indications that the investor has a special relationship with the investee, which suggests that the investor has more than a passive interest in the investee. The existence of any individual indicator, or a particular combination of indicators, does not necessarily mean that the power criterion is met. However, having more than a passive interest in the investee may indicate that the investor has other related rights sufficient to give it power or provide evidence of existing power over an investee. For example, the following suggests that the investor has more than a passive interest in the investee and, in combination with other rights, may indicate power:
(a) The investee's key management personnel who have the ability to direct the relevant activities are current or previous employees of the investor.
(b) The investee's operations are dependent on the investor, such as in the following situations:
(i) The investee depends on the investor to fund a significant portion of its operations.
(ii) The investor guarantees a significant portion of the investee's obligations.
(iii) The investee depends on the investor for critical services, technology, supplies or raw materials.
(iv) The investor controls assets such as licences or trademarks that are critical to the investee's operations.
(v) The investee depends on the investor for key management personnel, such as when the investor's personnel have specialised knowledge of the investee's operations.
(c) A significant portion of the investee's activities either involve or are conducted on behalf of the investor.
(d) The investor's exposure, or rights, to returns from its involvement with the investee is disproportionately greater than its voting or other similar rights. For example, there may be a situation in which an investor is entitled, or exposed, to more than half of the returns of the investee but holds less than half of the