Corporations Act 2001

CHAPTER 6 - TAKEOVERS  

Note: This Chapter only applies to acquisitions of interests in a CCIV if the CCIV is a listed company: see Division 1 of Part 8B.7 .

SECTION 602  

602   PURPOSES OF CHAPTER  
The purposes of this Chapter are to ensure that:

(a)    the acquisition of control over:

(i) the voting shares in a listed company, or an unlisted company with more than 50 members; or

(ii) the voting shares in a listed body (other than a notified foreign passport fund); or

(iii) the voting interests in a listed registered scheme;

takes place in an efficient, competitive and informed market; and

(b)    the holders of the shares or interests, and the directors of the company or body or the responsible entity for the scheme:

(i) know the identity of any person who proposes to acquire a substantial interest in the company, body or scheme; and

(ii) have a reasonable time to consider the proposal; and

(iii) are given enough information to enable them to assess the merits of the proposal; and

(c)    as far as practicable, the holders of the relevant class of voting shares or interests all have a reasonable and equal opportunity to participate in any benefits accruing to the holders through any proposal under which a person would acquire a substantial interest in the company, body or scheme; and

(d)    an appropriate procedure is followed as a preliminary to compulsory acquisition of voting shares or interests or any other kind of securities under Part 6A.1 .

Note 1: To achieve the objectives referred to in paragraphs (a), (b) and (c), the prohibition in section 606 and the exceptions to it refer to interests in " voting shares " . To achieve the objective in paragraph (d), the provisions that deal with the takeover procedure refer more broadly to interests in " securities " .

Note 2: Subsection 92(3) defines securities for the purposes of this Chapter.

SECTION 602A   MEANING OF SUBSTANTIAL INTEREST  

602A(1)    
A reference in this Chapter to a substantial interest in a company, listed body (other than a notified foreign passport fund) or listed registered scheme is not to be read as being limited to an interest that is constituted by one or more of the following:

(a)    a relevant interest in securities in the company, body or scheme;

(b)    a legal or equitable interest in securities in the company, body or scheme;

(c)    a power or right in relation to:

(i) the company, body or scheme; or

(ii) securities in the company, body or scheme.

602A(2)    
A person does not have a substantial interest in the company, body or scheme for the purposes of this Chapter merely because the person has an interest in, or a relationship with, the company, body or scheme of a kind prescribed by the regulations for the purposes of this subsection.

602A(3)    

The regulations may provide that an interest of a particular kind is an interest that may constitute a substantial interest in a company, listed body (other than a notified foreign passport fund) or listed registered scheme for the purposes of this Chapter.

SECTION 603  

603   CHAPTER EXTENDS TO SOME LISTED BODIES THAT ARE NOT COMPANIES  
This Chapter applies to the acquisition of relevant interests in the securities of listed bodies that are not companies but are incorporated or formed in Australia in the same way as it applies to the acquisition of relevant interests in the securities of companies.

Note: Section 9 defines company and listed .

SECTION 604   CHAPTER EXTENDS TO LISTED REGISTERED SCHEMES  

604(1)    
This Chapter applies to the acquisition of relevant interests in the interests in a registered scheme that is also listed as if:

(a)    the scheme were a listed company; and

(b)    interests in the scheme were shares in the company; and

(c)    voting interests in the scheme were voting shares in the company; and

(d)    a meeting of the members of the scheme were a general meeting of the company; and

(e)    the obligations and powers that are imposed or conferred on the company were imposed or conferred on the responsible entity; and

(f)    the directors of the responsible entity were the directors of the company; and

(g)    the appointment of a responsible entity for the scheme were the election of a director of the company; and

(h)    the scheme ' s constitution were the company ' s constitution.

Note 1: Paragraph (g): See subsection 610(2) .

Note 2: Section 9 defines voting interest in a managed investment scheme.

604(2)    

The regulations may modify the operation of this Chapter as it applies in relation to the acquisition of interests in listed registered schemes.

SECTION 605   CLASSES OF SECURITIES  

605(1)    
Takeover bids are made for securities within a particular class. Similarly, compulsory acquisition and buy-out rights operate on securities within a particular class.

605(2)    
For the purposes of this Chapter and Chapters 6A and 6C , securities are not taken to be different classes merely because:

(a)    some of the securities are fully-paid and others are partly-paid; or

(b)    different amounts are paid up or remain unpaid on the securities.

SECTION 605A  

605A   CHAPTER DOES NOT APPLY TO MCIs  

This Chapter does not apply to MCIs.

PART 6.1 - PROHIBITED ACQUISITIONS OF RELEVANT INTERESTS IN VOTING SHARES  

SECTION 606   PROHIBITION ON CERTAIN ACQUISITIONS OF RELEVANT INTERESTS IN VOTING SHARES  
Acquisition of relevant interests in voting shares through transaction entered into by or on behalf of person acquiring relevant interest

606(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%.

Note 1: Section 9 defines company as meaning a company registered under this Act.

Note 2: Section 607 deals with the effect of a contravention of this section on transactions. Sections 608 to 609B 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.

606(1A)    

However, the person may acquire the relevant interest under one of the exceptions set out in section 611 without contravening subsection (1) .

Note: A defendant bears an evidential burden in relation to the matter in subsection (1A) , see subsection 13.3(3) of the Criminal Code .

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

606(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%.

606(2A)    

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 subsection (2) .

Note: A defendant bears an evidential burden in relation to the matter in subsection (2A) , see subsection 13.3(3) of the Criminal Code .

50 member threshold

606(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

606(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.

Fault-based offence

606(4A)    

A person commits an offence if the person contravenes subsection (1) , (2) or (4) .

Absolute liability offence

606(4B)    

A person commits an offence of absolute liability if the person contravenes subsection (1) , (2) or (4) .

Defences

606(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.

Note: A defendant bears a legal burden in relation to a matter mentioned in subsection (5) , see section 13.4 of the Criminal Code .

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

606(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.

SECTION 607  

607   EFFECT ON TRANSACTIONS  
A transaction is not invalid merely because it involves a contravention of section 606 .

SECTION 608   RELEVANT INTERESTS IN SECURITIES  
Basic rule - relevant interest is holding, or controlling voting or disposal of, securities

608(1)    
A person has a relevant interest in securities if they:

(a)    are the holder of the securities; or

(b)    have power to exercise, or control the exercise of, a right to vote attached to the securities; or

(c)    have power to dispose of, or control the exercise of a power to dispose of, the securities.

It does not matter how remote the relevant interest is or how it arises. If 2 or more people can jointly exercise one of these powers, each of them is taken to have that power.

Extension to control exercisable through a trust, agreement or practice

608(2)    
In this section, power or control includes:

(a)    power or control that is indirect; and

(b)    power or control that is, or can be, exercised as a result of, by means of or by the revocation or breach of:

(i) a trust; or

(ii) an agreement; or

(iii) a practice; or

(iv) any combination of them;

whether or not they are enforceable; and

(c)    power or control that is, or can be made, subject to restraint or restriction.

It does not matter whether the power or control is express or implied, formal or informal, exercisable alone or jointly with someone else. It does not matter that the power or control cannot be related to a particular security.

Extension to relevant interests held through bodies corporate

608(3)    
A person has the relevant interests in any securities that any of the following has:

(a)    a body corporate, or managed investment scheme, in which the person's voting power is above 20%;

(b)    a body corporate, or managed investment scheme, that the person controls.

Paragraph (a) does not apply to a relevant interest that the body corporate or scheme itself has in the securities merely because of the operation of that paragraph in relation to another body corporate or managed investment scheme.

608(4)    
For the purposes of paragraph (3)(b) , a person controls a body corporate if the person has the capacity to determine the outcome of decisions about the body corporate's financial and operating policies.

608(5)    
In determining whether a person has this capacity:

(a)    the practical influence the person can exert (rather than the rights they can enforce) is the issue to be addressed; and

(b)    any practice or pattern of behaviour affecting the body corporate's financial or operating policies is to be taken into account (even if it involves a breach of an agreement or a breach of trust).

608(6)    
The person does not control the body corporate merely because the person and an entity that is not an associate jointly have the capacity to determine the outcome of decisions about the body corporate's financial and operating policies.

608(7)    
A person is not taken to control a body corporate merely because of a capacity they have if they are under a legal obligation to exercise that capacity for the benefit of:

(a)    if the person is an individual - someone else; or

(b)    if the person is a body corporate - someone other than its members.

Extension to control in anticipation of performance of agreements etc.

608(8)    
If at a particular time all the following conditions are satisfied:

(a)    a person has a relevant interest in issued securities;

(b)    the person (whether before or after acquiring the relevant interest):

(i) has entered or enters into an agreement with another person with respect to the securities; or

(ii) has given or gives another person an enforceable right, or has been or is given an enforceable right by another person, in relation to the securities (whether the right is enforceable presently or in the future and whether or not on the fulfilment of a condition); or

(iii) has granted or grants an option to, or has been or is granted an option by, another person with respect to the securities;

(c)    the other person would have a relevant interest in the securities if the agreement were performed, the right enforced or the option exercised;

the other person is taken to already have a relevant interest in the securities.

Note: Subsections 609(6) and (7) deal with specific situations in which the agreement will not give rise to a relevant interest.

Body corporate may have relevant interest in its own securities

608(9)    
This section may result in a body corporate having a relevant interest in its own securities.

Extension to interests in listed notified foreign passport funds

608(10)    
To avoid doubt, for the purposes of Chapter 6C , a person has a relevant interest in securities if the person would have a relevant interest in the securities if securities had the same meaning in this Chapter as it has in Chapter 6C .

SECTION 609   SITUATIONS NOT GIVING RISE TO RELEVANT INTERESTS  

Money lending and financial accommodation

609(1)    

A person does not have a relevant interest in securities merely because of a security interest taken or acquired by the person if:

(a)    

the security interest is taken or acquired:

(i) in the ordinary course of the person ' s business of the provision of financial accommodation by any means and on ordinary commercial terms; or

(ii) for the benefit of one or more other persons in relation to financial accommodation provided by them in the ordinary course of their business of the provision of financial accommodation by any means and on ordinary commercial terms; and

(b)    

the person whose property is subject to the security interest is not an associate of any other person mentioned in this subsection.

In this subsection, a reference to a security interest includes a reference to a negative pledge.

Note: Sections 11 to 17 define associate .

Nominees and other trustees

609(2)    
A person who would otherwise have a relevant interest in securities as a bare trustee does not have a relevant interest in the securities if a beneficiary under the trust has a relevant interest in the securities because of a presently enforceable and unconditional right of the kind referred to in subsection 608(8) .

Note: This subsection will often apply to a person who holds securities as a nominee.

Holding of securities by financial services licensee

609(3)    

A financial services licensee does not have a relevant interest in securities merely because they hold securities on behalf of someone else in the ordinary course of their financial services business.

Disposal of securities by financial services licensees

609(3A)    

A financial services licensee does not have a relevant interest in securities merely because, in the ordinary course of the licensee ' s financial services business, a person specifically instructs the licensee to:

(a)    dispose of the securities on behalf of the person; or

(b)    enter into a position on behalf of the person under which the licensee has an obligation to make delivery of the securities by dealing in:

(i) a warrant within the meaning of the regulations; or

(ii) a financial product that, but for the product not being transferable, would be a warrant within the meaning of the regulations.

Shares covered by buy-backs

609(4)    
A person does not have a relevant interest in a company ' s shares if the relevant interest would arise merely because the company has entered into an agreement to buy back the shares.

Proxies

609(5)    
A person does not have a relevant interest in securities merely because the person has been appointed to vote as a proxy or representative at a meeting of members, or of a class of members, of the company, body or managed investment scheme if:

(a)    the appointment is for one meeting only; and

(b)    neither the person nor any associate gives valuable consideration for the appointment.

Market traded options and derivatives

609(6)    
A person does not have a relevant interest in securities merely because of:

(a)    

an [ sic ] market traded option over the securities; or

(b)    

a right to acquire the securities given by a derivative.

This subsection stops applying to the relevant interest when the obligation to make or take delivery of the securities arises.

Note: Without this subsection, subsection 608(8) would create a relevant interest from the option or contract.

Conditional agreements

609(7)    
A person does not have a relevant interest in securities merely because of an agreement if the agreement:

(a)    is conditional on:

(i) a resolution under item 7 in the table in section 611 being passed; or

(ii) ASIC exempting the acquisition under the agreement from the provisions of this Chapter under section 655A; and

(b)    does not confer any control over, or power to substantially influence, the exercise of a voting right attached to the securities; and

(c)    does not restrict disposal of the securities for more than 3 months from the date when the agreement is entered into.

The person acquires a relevant interest in the securities when the condition referred to in paragraph (a) is satisfied.

Pre-emptive rights

609(8)    
A member of a company, body or managed investment scheme does not have a relevant interest in securities of the company, body or scheme merely because the company ' s, body ' s or scheme ' s constitution gives members pre-emptive rights on the transfer of the securities if all members have pre-emptive rights on the same terms.

Director of body corporate holding securities

609(9)    
A person does not have a relevant interest in securities merely because:

(a)    the person is a director of a body corporate; and

(b)    the body corporate has a relevant interest in those securities.

Clearing and settlement facilities

609(9A)    

The operator of a clearing and settlement facility does not have a relevant interest in securities merely because of its provision of facilities for the settlement of transactions.

Securities escrowed under listing rules

609(9B)    

A listed company does not have a relevant interest in securities merely because:

(a)    

those securities are restricted securities within the meaning of the listing rules of a declared financial market; and

(b)    the company applies restrictions, in accordance with those rules, on the disposal of the securities by their holder.

609(9C)    

The operator of a declared financial market does not have a relevant interest in securities merely because:

(a)    those securities are restricted securities within the meaning of the listing rules of that market; and

(b)    the operator has the power under those rules to control the exercise of a power to dispose of the securities.

Prescribed exclusions

609(10)    
A person does not have a relevant interest in securities in the circumstances specified in the regulations. The regulations may provide that interests in securities are not relevant interests subject to specified conditions.

SECTION 609A   ANOTHER SITUATION NOT GIVING RISE TO RELEVANT INTERESTS - ACCEPTANCE FACILITY  

Securities the subject of an acceptance facility

609A(1)    

A bidder for a takeover bid does not have a relevant interest in bid class securities merely because those securities are the subject of an acceptance, in relation to a facility, that is given to the operator of the facility if:

(a)    the offer under the takeover bid for those securities has not been accepted; and

(b)    the facility is covered by subsection (2) ; and

(c)    in the case where bid class securities are quoted on a declared financial market - for every movement of at least 1% in the aggregate level of the bidder ' s voting power and the votes attached to bid class securities the subject of acceptances in relation to the facility, the bidder provides to the relevant market operator, by 9.30 am on the next trading day after the movement, a notice (whether accompanying a notice required to be given under section 671B or otherwise) that meets the requirements of subsection (4) of this section; and

(d)    in the case where bid class securities are not quoted on a declared financial market - the bidder lodges with ASIC a notice that meets the requirements of subsection (4) of this section within 2 business days after the aggregate level of the bidder ' s voting power and the votes attached to bid class securities the subject of acceptances in relation to the facility rise or fall above or below a percentage listed in subsection 654C(1) .

Facility requirements

609A(2)    

The facility is covered by this subsection if:

(a)    it is the only facility established by the bidder in relation to bid class securities; and

(b)    the operator of the facility is not the bidder or an associate of the bidder; and

(c)    the operator holds an Australian financial services licence that covers the provision of financial services of the kind necessary to operate the facility; and

(d)    a participant in the facility may give the operator acceptances in relation to the facility; and

(e)    the terms of the facility permit the operator to maintain custody of an acceptance in relation the facility given to the operator by a participant in the facility until:

(i) the participant withdraws the acceptance; or

(ii) any condition of a kind specified in subsection (3) that is specified in the facility is satisfied; and

(f)    the terms of the facility provide that the facility:

(i) if the bid is unconditional - must be made available to all holders of bid class securities or persons on whose behalf bid class securities are held; or

(ii) otherwise - must be made available to all or specified holders of bid class securities or persons on whose behalf bid class securities are held; and

(g)    in the case where bid class securities are quoted on a declared financial market - the terms of the facility provide that the operator of the facility must provide information about acceptances in relation to the facility to the bidder sufficiently regularly to enable the bidder to determine and disclose to the market operator every movement of at least 1% in the aggregate level of the bidder ' s voting power and the votes attached to securities the subject of acceptances in relation to the facility by 9.30 am on the next trading day after the movement; and

(h)    in the case where bid class securities are not quoted on a declared financial market - the terms of the facility provide that the operator of the facility must provide information about acceptances in relation to the facility to the bidder sufficiently regularly to enable to the bidder to determine and disclose to the target any movement in the aggregate level of the bidder ' s voting power and the votes attached to securities the subject of acceptances in relation to the facility above or below a percentage listed in subsection 654C(1) within 2 business days after the movement; and

(i)    the terms of the facility provide that all participants in the facility participate in the facility on the same terms.

Triggering conditions

609A(3)    
The following conditions are specified for the purposes of subparagraph (2)(e)(ii) :

(a)    a condition that, no later than the time that all acceptances in relation to the facility are processed, the bidder has:

(i) declared the bid free of all conditions; or

(ii) stated that the bidder will declare the bid free of all conditions;

(b)    a condition that the securities in which the bidder and its associates have a relevant interest together with the securities that are the subject of the facility have exceeded a specified percentage of securities in the bid class;

(c)    a condition that the bidder has notified the operator of the facility in writing that a condition in paragraph (a) or (b) has been satisfied.

Notice requirements

609A(4)    
For the purposes of paragraphs (1)(c) and (d) , a notice meets the requirements of this subsection if the notice:

(a)    sets out the aggregate number and percentage of bid class securities:

(i) in which the bidder and its associates have a relevant interest; and

(ii) which are subject of acceptances in relation to the facility; and

(b)    discloses the breakdown between the 2 categories in subparagraphs (a)(i) and (ii) of this subsection; and

(c)    includes a statement setting out the preconditions for the operator of the facility releasing the acceptances and warning that theacceptances may be withdrawn by participants in the facility at any time until the preconditions are met.

Definitions

609A(5)    
In this section:

acceptance
, in relation to a facility, means an instrument that comprises:

(a) a participant in the facility ' s completed acceptance of a bidder ' s offer for bid class securities; or

(b) a participant in the facility ' s instructions to another person who holds bid class securities on behalf of the participant to accept a bidder ' s offer for bid class securities.

participant
, in a facility, means:

(a) a holder of bid class securities who is specified in the facility; or

(b) a person who is specified in the facility and on whose behalf bid class securities are held.

SECTION 609B   ANOTHER SITUATION NOT GIVING RISE TO RELEVANT INTERESTS - SECURITIES SUBJECT TO ESCROW AGREEMENT IN CONNECTION WITH INITIAL PUBLIC OFFER ETC.  

Bodies corporate

609B(1)    
A body corporate does not have a relevant interest in securities that are its own securities (the escrow securities ) merely because, under an agreement entered into by the body corporate with the holder of the escrow securities (the escrow agreement ), the body corporate applies restrictions on the disposal of the escrow securities by the holder.

609B(2)    
However, subsection (1) applies only if:

(a)    

all of the following apply:

(i) the body corporate enters into the escrow agreement in connection with an offer of securities in the body corporate that are in a class of securities that are to be quoted on a declared financial market (the initial public offer );

(ii) the escrow securities are in the same class of securities as those that are offered under the initial public offer;

(iii) the escrow agreement is covered by subsection (5) ; or

(b)    both of the following apply:

(i) the escrow securities are issued as consideration for the acquisition of a business under a separate agreement between the body corporate and the vendor of the business;

(ii) the escrow agreement is covered by subsection (5) .

Underwriters, lead managers and joint lead managers

609B(3)    
A person does not have a relevant interest in the escrow securities merely because, under an agreement entered into by the person with the holder of the escrow securities in the ordinary course of the person ' s business as an underwriter, lead manager or joint lead manager, the person applies restrictions on the disposal of the escrow securities by the holder.

609B(4)    
However, subsection (3) applies only if:

(a)    the person enters into the agreement mentioned in that subsection in connection with the initial public offer; and

(b)    the escrow securities are in the same class of securities as those that are covered by the initial public offer; and

(c)    the agreement mentioned in that subsection is covered by subsection (5) .

Agreement requirements

609B(5)    
An agreement relating to the escrow securities is covered by this subsection if:

(a)    the agreement does not restrict the exercise of voting rights attaching to the escrow securities; and

(b)    in the case of a takeover bid (including a proportional takeover bid):

(i) the agreement allows each holder of the escrow securities to accept into the takeover bid where the holders of at least half of the bid class securities that are not subject to escrow have accepted into the bid; and

(ii) the agreement requires that the escrow securities be returned to escrow if the bid does not become unconditional; and

(c)    the agreement allows the escrow securities to be transferred or cancelled as part of a merger by way of a compromise or arrangement under Part 5.1 ; and

(d)    the agreement terminates no later than:

(i) if the person who entered into the agreement is the body corporate mentioned in subsection (1) - 2 years after the agreement is entered into; or

(ii) otherwise - 1 year after the agreement is entered into; and

(e)    if the agreement permits the holder to create a security interest in some or all of the escrow securities in favour of a person who does not have a relevant interest in the escrow securities because of subsection 609(1) - the agreement requires that the holder must not create a security interest in favour of the person unless the person has agreed in writing to take or acquire the security interest in the escrow securities subject to the terms of the agreement; and

(f)    if the agreement permits the holder to transfer the holder ' s interests in the escrow securities to another person - requires that the holder must not do so if:

(i) the transfer would result in a change in the beneficial ownership of the escrow securities; or

(ii) the transfer would result in an extension in the period of the agreement; or

(iii) the transferee does not agree to be subject to the same restrictions on disposal of the escrow securities under the agreement.

SECTION 610   VOTING POWER IN A BODY OR MANAGED INVESTMENT SCHEME  

Person ' s voting power in a body or managed investment scheme

610(1)    
A person ' s voting power in a designated body is:

Person ' s and associates ' votes Total votes in designated body

×

100

where:

person ' s and associates ' votes
is the total number of votes attached to all the voting shares in the designated body (if any) that the person or an associate has a relevant interest in.

total votes in designated body
is the total number of votes attached to all voting shares in the designated body.

Note: Even if a person ' s relevant interest in voting shares is based on control over disposal of the shares (rather than control over voting rights attached to the shares), their voting power in the designated body is calculated on the basis of the number of votes attached to those shares.

Counting votes

610(2)    
For the purposes of this section, the number of votes attached to a voting share in a designated body is the maximum number of votes that can be cast in respect of the share on a poll:

(a)    if the election of directors is determined by the casting of votes attached to voting shares - on the election of a director of the designated body; or

(b)    if the election of directors is not determined by the casting of votes attached to voting shares - on the adoption of a constitution for the designated body or the amendment of the body corporate ' s constitution.

Note: The Takeovers Panel may decide that the setting or varying of voting rights in a way that affects control of a designated body is unacceptable circumstances under section 657A.

610(3)    
If:

(a)    a transaction in relation to, or an acquisition of an interest in, securities occurs; and

(b)    before the transaction or acquisition, a person did not have a relevant interest in particular voting shares but an associate of the person did have a relevant interest in those shares; and

(c)    because of the transaction or acquisition, the person acquires a relevant interest in those shares;

then, for the purposes of applying section 606 to the transaction or acquisition, the person ' s voting power is taken to have increased because of the transaction or acquisition from what it would have been before the transaction or acquisition if the votes attached to those shares were disregarded to what it was after the transaction or acquisition (taking the votes attached to those shares into account).

610(3A)    

However, subsection (3) does not apply in relation to a subsidiary acquiring an interest in securities from its holding company with the result that the subsidiary acquires a relevant interest in particular voting shares unless:

(a)    the acquisition results in an increase of another person ' s voting power in a designated body; and

(b)    that other person is not a subsidiary of the ultimate holding company.

610(4)    
Disregard the operation of section 613 in working out a person ' s voting power in a designated body.

When a designated body is a managed investment scheme

610(5)    

For the purposes of the application of this section in relation to a designated body that is a managed investment scheme:

(a)    a reference to voting shares in the designated body is taken to be a reference to voting interests in the scheme; and

(b)    a reference to the election of directors of the designated body is taken to be a reference to:

(i) if the scheme is a registered scheme - the appointment of a responsible entity for the scheme; or

(ii) if the scheme is not a registered scheme - the appointment of a person to the office (by whatever name it is known) in relation to the scheme that corresponds most closely to the office of responsible entity of a registered scheme; and

(c)    a reference to the designated body ' s constitution is taken to be a reference to the scheme ' s constitution.

Meaning of designated body

610(6)    

In this section:

designated body
means:

(a) a body; or

(b) a managed investment scheme.