2008-2009 The Parliament of the Commonwealth of Australia HOUSE OF REPRESENTATIVES Presented and read a first time Foreign Acquisitions and Takeovers Amendment Bill 2009 No. , 2009 (Treasury) A Bill for an Act to amend the Foreign Acquisitions and Takeovers Act 1975, and for related purposes [Page Break] 1 Short title ........................................................................................... 1 2 Commencement ................................................................................. 1 3 Schedule(s) ........................................................................................ 2 Schedule 1--Amendments 3 Foreign Acquisitions and Takeovers Act 1975 3 Schedule 2--Transitional provisions 8 i Foreign Acquisitions and Takeovers Amendment Bill 2009 No. , 2009 [Page Break] 2 and Takeovers Act 1975, and for related purposes 3 The Parliament of Australia enacts: 4 1 Short title 5 This Act may be cited as the Foreign Acquisitions and Takeovers 6 Amendment Act 2009. 7 2 Commencement 8 (1) Each provision of this Act specified in column 1 of the table 9 commences, or is taken to have commenced, in accordance with 10 column 2 of the table. Any other statement in column 2 has effect 11 according to its terms. 12 Foreign Acquisitions and Takeovers Amendment Bill 2009 No. , 2009 1 [Page Break] Column 1 Column 2 Column 3 Provision(s) Commencement Date/Details 1. Sections 1 to 3 The day this Act receives the Royal Assent. and anything in this Act not elsewhere covered by this table 2. Schedule 1 12 February 2009. 12 February 2009 3. Schedule 2 The day this Act receives the Royal Assent. 1 Note: This table relates only to the provisions of this Act as originally 2 passed by both Houses of the Parliament and assented to. It will not be 3 expanded to deal with provisions inserted in this Act after assent. 4 (2) Column 3 of the table contains additional information that is not 5 part of this Act. Information in this column may be added to or 6 edited in any published version of this Act. 7 3 Schedule(s) 8 Each Act that is specified in a Schedule to this Act is amended or 9 repealed as set out in the applicable items in the Schedule 10 concerned, and any other item in a Schedule to this Act has effect 11 according to its terms. 12 2 Foreign Acquisitions and Takeovers Amendment Bill 2009 No. , 2009 [Page Break] 1 Schedule 1--Amendments 2 3 Foreign Acquisitions and Takeovers Act 1975 4 1 Subsection 5(1) 5 Insert: 6 aggregate substantial interest in a corporation has the meaning 7 given by subsection 9(1A). 8 2 Subsection 5(1) 9 Insert: 10 potential voting power has the meaning given by subsection 14(2). 11 3 Subsection 5(1) (paragraph (b) of the definition of share) 12 Omit "or 26". 13 4 Subsection 5(1) 14 Insert: 15 substantial interest in a corporation has the meaning given by 16 subsection 9(1). 17 5 Subsection 5(1) 18 Insert: 19 voting power has the meaning given by subsection 14(1). 20 6 At the end of paragraphs 5(4)(a) and (c) 21 Add "and". 22 7 After paragraph 5(4)(c) 23 Insert: 24 (d) acquiring an asset or a share; 25 8 Subsection 9(1) 26 Repeal the subsection, substitute: Foreign Acquisitions and Takeovers Amendment Bill 2009 No. , 2009 3 [Page Break] 1 (1) For the purposes of this Act, a person is taken to hold a substantial 2 interest in a corporation if the person, alone or together with any 3 associate or associates of the person: 4 (a) is in a position to control not less than 15% of the voting 5 power in the corporation; or 6 (b) is in a position to control not less than 15% of the potential 7 voting power in the corporation; or 8 (c) holds interests in not less than 15% of the issued shares in the 9 corporation; or 10 (d) would hold interests in not less than 15% of the issued shares 11 in the corporation, if shares in the corporation were issued as 12 the result of the exercise of all rights of a kind mentioned in 13 subsection 11(2A). 14 (1A) For the purposes of this Act, 2 or more persons are taken to hold an 15 aggregate substantial interest in a corporation if they, together 16 with any associate or associates of any of them: 17 (a) are in a position to control not less than 40% of the voting 18 power in the corporation; or 19 (b) are in a position to control not less than 40% of the potential 20 voting power in the corporation; or 21 (c) hold interests in not less than 40% of the issued shares in the 22 corporation; or 23 (d) would hold interests in not less than 40% of the issued shares 24 in the corporation, if shares in the corporation were issued as 25 the result of the exercise of all rights of a kind mentioned in 26 subsection 11(2A). 27 9 After subsection 11(2) 28 Insert: 29 (2A) To avoid doubt, a right covered by paragraph (2)(b) or (c) includes 30 a right under an instrument, agreement or arrangement, whether the 31 right is exercisable presently or in the future and whether on the 32 fulfilment of a condition or not. 33 Example: A convertible note. 34 10 Section 14 35 Before "In this Act", insert "(1)". 4 Foreign Acquisitions and Takeovers Amendment Bill 2009 No. , 2009 [Page Break] 1 Note: The heading to section 14 is altered by omitting "Voting power" and substituting 2 "Voting power and potential voting power". 3 11 Section 14 4 Omit "voting power", substitute "voting power". 5 12 At the end of section 14 6 Add: 7 (2) In this Act, a reference to potential voting power in a corporation 8 is a reference to the voting power in the corporation, on the 9 assumption that the votes that might be cast at a general meeting of 10 the corporation included each vote that: 11 (a) because of the exercise of a right (whether the right is 12 exercisable presently or in the future and whether on the 13 fulfilment of a condition or not), might come to exist in the 14 future; and 15 (b) if it came into existence, might be cast at a general meeting 16 of the corporation. 17 13 After paragraph 18(3)(a) 18 Insert: 19 (aa) be in a position to control more of the total potential voting 20 power in the corporation than: 21 (i) such proportion of the total potential voting power in 22 the corporation as is equal to the proportion of the total 23 potential voting power in the corporation at the time of 24 the coming into operation of the first-mentioned order 25 that that foreign person, together with any associate or 26 associates of that person, was in a position to control at 27 that time; or 28 (ii) such greater proportion (if any) of the total potential 29 voting power in the corporation as is specified in the 30 order; or 31 14 Paragraph 20(5)(a) 32 After "determine the policy of the corporation", insert "in relation to 33 any matter". 34 15 Paragraph 21(5)(a) Foreign Acquisitions and Takeovers Amendment Bill 2009 No. , 2009 5 [Page Break] 1 After "determine the policy of the business", insert "in relation to any 2 matter". 3 16 Paragraph 26(2)(a) 4 Omit "acquires a substantial shareholding", substitute "acquires a 5 substantial interest". 6 17 Paragraph 26(2)(b) 7 Omit "acquire a substantial shareholding", substitute "acquire a 8 substantial interest". 9 18 Paragraph 26(3)(b) 10 Omit "the acquisition of the interests in the shares", substitute "the 11 acquisition of the substantial interest". 12 19 Subsection 26(5A) 13 Omit "the acquisition of a substantial shareholding", substitute "the 14 acquisition of a substantial interest". 15 20 Subsection 26(6) 16 Repeal the subsection, substitute: 17 (6) In this section, a reference to an agreement by virtue of which a 18 person acquires a substantial interest in a corporation is a reference 19 to an agreement by virtue of which: 20 (a) the person: 21 (i) starts to hold a substantial interest in the corporation; or 22 (ii) would start to hold a substantial interest in the 23 corporation on the assumption that the person held 24 interests in shares that are interests that he or she has 25 offered to acquire; or 26 (iii) would start to hold a substantial interest in the 27 corporation on the assumption that the person held 28 rights to votes that might be cast at a general meeting of 29 the corporation that are rights that he or she has offered 30 to acquire; or 31 (b) if the person already holds a substantial interest in the 32 corporation--any of the following conditions are satisfied: 6 Foreign Acquisitions and Takeovers Amendment Bill 2009 No. , 2009 [Page Break] 1 (i) the person becomes in a position to control more of the 2 voting power or potential voting power in the 3 corporation; 4 (ii) the person starts to hold additional interests in the issued 5 shares in the corporation; 6 (iii) the person would start to hold additional interests in the 7 issued shares in the corporation, if shares in the 8 corporation were issued as the result of the exercise of 9 all rights of a kind mentioned in subsection 11(2A). 10 21 Subsection 26(7) 11 After "interests in shares" (wherever occurring), insert "or rights". 12 Foreign Acquisitions and Takeovers Amendment Bill 2009 No. , 2009 7 [Page Break] 1 Schedule 2--Transitional provisions 2 3 1 Transitional--arrangements entered into between 4 12 February 2009 and commencement 5 (1) This item applies if: 6 (a) a person enters into an arrangement in the period: 7 (i) starting on 12 February 2009; and 8 (ii) ending on the day on which this item commences; and 9 (b) by entering into the arrangement, the person: 10 (i) would not have committed an offence under subsection 11 26(2) of the Foreign Acquisitions and Takeovers Act 12 1975 (disregarding the amendments made by 13 Schedule 1 to this Act); and 14 (ii) would (apart from subitem (2)) have committed an 15 offence under subsection 26(2) of the Foreign 16 Acquisitions and Takeovers Act 1975 (as amended by 17 Schedule 1 to this Act). 18 Note: The amendments in Schedule 1 are taken to have commenced on 12 February 2009. 19 (2) The person is taken not to have committed the offence mentioned in 20 subparagraph (1)(b)(ii). 21 (3) Section 25 of the Foreign Acquisitions and Takeovers Act 1975 applies 22 to the arrangement as if: 23 (a) the arrangement were still a proposed arrangement; and 24 (b) paragraphs (1C)(b), (1D)(b) and (2)(b) and 25 subparagraph (3)(c)(ii) of that section were omitted. 26 (4) Without limiting section 27 of that Act, a form prescribed for the 27 purposes of that section may deal with notification of an arrangement to 28 which this item applies. 29 2 Transitional--requirement to give notice after 30 commencement of certain pre-commencement 31 arrangements 32 A person commits an offence if: 33 (a) the person enters into an arrangement in the period: 34 (i) starting on 12 February 2009; and 8 Foreign Acquisitions and Takeovers Amendment Bill 2009 No. , 2009 [Page Break] 1 (ii) ending on the day on which this item commences; and 2 (b) by entering into the arrangement, the person: 3 (i) would not have committed an offence under subsection 4 26(2) of the Foreign Acquisitions and Takeovers Act 5 1975 (disregarding the amendments made by 6 Schedule 1 to this Act); and 7 (ii) would (apart from subitem 1(2)) have committed an 8 offence under subsection 26(2) of the Foreign 9 Acquisitions and Takeovers Act 1975 (as amended by 10 Schedule 1 to this Act); and 11 (c) the person does not give the Treasurer a notice having effect 12 for the purposes of section 25 of that Act in respect of the 13 arrangement within 30 days after the day on which this item 14 commences. 15 Penalty: 500 penalty units or imprisonment for 2 years, or both. Foreign Acquisitions and Takeovers Amendment Bill 2009 No. , 2009 9