Document ID: chunk:federal_register_of_legislation:C2004A04501:schedule:3:p6
Version: federal_register_of_legislation:C2004A04501
Segment Type: schedule
Provision Reference: sch 3 (pt 6/16)
Character Range: 128528–131240

('the associate') in respect of the giving or proposed giving of a financial benefit ('the primary benefit') by the public company, or by a child entity of the public company, to the associate; and

    (c)     so acted, or proposes so to act, for the reason, or for reasons including the reason, that a financial benefit has been given to a related party of the public company or is expected to be so given;

the associate is a related party of the public company in relation to the giving or proposed giving of the primary benefit.

Giving a financial benefit

  "243G.(1) A reference to an entity giving a financial benefit:

    (a)     is intended to operate broadly, even though criminal or civil penalties may be involved; and

    (b)     includes a reference to giving a financial benefit indirectly (for example, through one or more interposed entities) or by making or giving effect to a relevant agreement (as defined in section 9).

  "(2) In deciding whether an entity has given a financial benefit:

     (a)     the economic and commercial substance and effect of what the entity has done is to prevail over its legal form; and

     (b)     any consideration that has been or may be given for the benefit is to be disregarded, even if it is full or adequate.

"(3) A benefit that does not involve the payment of money can still be a financial benefit: for example, if it confers some financial advantage.

"(4) A few examples of an entity giving a financial benefit to another entity are:

     (a)     the first entity lending the other money, guaranteeing a loan to the other, or providing security for a loan to the other;

     (b)     the first entity forgiving a debt owed by the other, otherwise releasing, or neglecting to enforce, an obligation of the other, or assuming an obligation of the other;

     (c)     the first entity buying or leasing an asset from the other, or selling or leasing an asset to the other;

     (d)     the first entity acquiring services from the other, or supplying services to the other;

     (e)     the first entity issuing securities, or granting an option, to the other;

   (f) the first entity giving money or property to the other.

"Division 3—The prohibitions

Prohibited financial benefits to related parties of public companies

"243H.(1) A public company must not give a financial benefit to a related party except as permitted by Division 4 or 5.

"(2) A child entity of a public company must not give a financial benefit to a related party of the public company except as permitted by Division 4 or 5.

Definitions:

  'public company': see the definition in section 9 (note especially paragraph (b) of the definition); 'give a financial