Commonwealth Repealed Acts

This legislation has been repealed.

CORPORATIONS LAW- SECT 606

Acquisition of relevant interests in voting shares through transaction entered into by or on behalf of person acquiring relevant interest

(1)

A person must not acquire a relevant interest in issued voting shares in a company if:

(a)

the company is:

(i)

a listed company; or

(ii)

an unlisted company with more than 50 members; and

(b)

the person acquiring the interest does so through a transaction in relation to securities entered into by or on behalf of the person; and

(c)

because of the transaction, that person's or someone else's voting power in the company increases:

(i)

from 20% or below to more than 20%; or

(ii)

from a starting point that is above 20% and below 90%.

However, the person may acquire the relevant interest under one of the exceptions set out in section 611 without contravening this subsection.

Note 1: Section 9 defines company as meaning a company incorporated, or taken to have been incorporated, in this jurisdiction.

Note 2: Section 607 deals with the effect of a contravention of this section on transactions. Sections 608 and 609 deal with the meaning of relevant interest. Section 610 deals with the calculation of a person's voting power in a company.

Note 3: If the acquisition of relevant interests in an unlisted company with 50 or fewer members leads to the acquisition of a relevant interest in another company that is an unlisted company with more than 50 members, or a listed company, the acquisition is caught by this section because of its effect on that other company.

Acquisition of legal or equitable interest giving rise to relevant interest for someone else

(2)

A person must not acquire a legal or equitable interest in securities of a body corporate if, because of the acquisition:

(a)

another person acquires a relevant interest in issued voting shares in a company that is:

(i)

a listed company; or

(ii)

an unlisted company with more than 50 members; and

(b)

someone's voting power in the company increases:

(i)

from 20% or below to more than 20%; or

(ii)

from a starting point that is above 20% and below 90%.

However, if the acquisition of the relevant interest is covered by one of the exceptions set out in section 611, the person may acquire the legal or equitable interest without contravening this subsection.

50 member threshold

(3)

In determining whether the company has more than 50 members for the purposes of subsection (1) or (2), count joint holders of a particular parcel of shares as 1 person.

Offers and invitations

(4)

A person must not:

(a)

make an offer, or cause an offer to be made on their behalf, if the person would contravene subsection (1) or (2) if the offer were accepted; or

(b)

issue an invitation, or cause an invitation to be issued on their behalf, if the person would contravene subsection (1) or (2) if:

(i)

an offer were made in response to the invitation; and

(ii)

the offer were accepted.

Defences

(5)

It is a defence to the prosecution of a person for contravening subsection (1), (2) or (4) if the person proves that they contravened the subsection:

(a)

because of inadvertence or mistake; or

(b)

because the person was not aware of a relevant fact or occurrence.

In determining whether the defence is available, disregard the person's ignorance of, or a mistake on the person's part concerning, a matter of law.

Extended meaning of acquiring relevant interests—conversions and increases in voting rights

(6)

A person is taken for the purposes of subsection (1) or (2) to acquire a relevant interest in voting shares in a company if:

(a)

securities in which the person already had a relevant interest become voting shares in the company; or

(b)

there is an increase in the number of votes that may be cast on a poll attached to voting shares that the person already had a relevant interest in.

The acquisition occurs when the securities become voting shares or the number of votes increases.

Note: Some examples of cases to which this subsection applies are:

* A person exercises a right to convert a non-voting preference share into an ordinary share that carries votes. * A person pays up partly-paid shares with limited votes and this leads to an increase in the number of votes attached to the shares.