Corporations Act 2001

SCHEDULE 4 - TRANSFER OF FINANCIAL INSTITUTIONS AND FRIENDLY SOCIETIES  

Note: See section 1465A .

PART 5 - DISCLOSURE OF THE PROPOSED DEMUTUALISATION  

CLAUSE 29   - DISCLOSURE FOR PROPOSED DEMUTUALISATION  

29(1)    

If:

(a) a modification of the constitution of an unlisted company registered under clause 3 of the transfer provisions is proposed; and

(b) the unlisted company is a mutual entity; and

(c) the modification would have the effect that the unlisted company would cease to be a mutual entity;

the following rules apply:

(f) notice of the meeting of the company ' s members at which the proposed modification is to be considered must be accompanied by the documents listed in subclause (4);

(g) notice of the meeting may not be shortened under subsection 249H(2);

(h) the company must lodge with ASIC the notice and the documents referred to in paragraphs (4)(a) and (c) within 7 days after notice of the meeting is given.

29(2)    
(Repealed by No 37 of 2019, s 3, Sch 1 [ 6] (effective 6 April 2019).)

29(3)    
ASIC may exempt a company from this Part under clause 30.

29(4)    
The documents that must accompany the notice are:

(a) a disclosure statement that:

(i) satisfies clause 31; and

(ii) ASIC has registered under clause 32; and

(b) an estimate of the financial benefits (if any) the member will be offered if the proposed modification occurs; and

(c) a report by an expert that:

(i) states whether, in the expert ' s opinion, the proposed modification is in the best interests of the members of the company as a whole; and

(ii) gives the expert ' s reasons for forming that opinion; and

(iii) complies with subclauses 33(2) and (3).

29(5)    

If the company contravenes subclause (1) it is not guilty of an offence.

29(6)    

A person contravenes this subclause if they are involved in a contravention of subclause (1).

Note 1: This subclause is a civil penalty provision.

Note 2: Section 79 defines involved .

29(7)    

A person commits an offence if they are involved in a contravention of subclause (1) and the involvement is dishonest.

Penalty:

(a) for an individual - 5 years imprisonment, 2,000 penalty units, or both; and

(b) for a body corporate - 20,000 penalty units.

29(8)    

In this clause:

reserves
includes general reserves and retained earnings of the company.

unlisted company
means a company (registered under clause 3) that does not have voting shares quoted on a prescribed financial market.

CLAUSE 30   - ASIC ' S EXEMPTION POWER  

30(1)    

If ASIC is satisfied that a company is not a mutual entity, it may exempt the company from this Part.

30(2) - 30(5)    
(Repealed by No 37 of 2019, s 3, Sch 1 [ 11] (effective 6 April 2019).)

30(6)    
The exemption must be in writing and ASIC must publish notice of it in the Gazette .

30(7)    
(Repealed by No 37 of 2019, s 3, Sch 1 [ 11] (effective 6 April 2019).)

CLAUSE 31  

31   - COVERAGE OF DISCLOSURE STATEMENT  

The disclosure statement must give all the information that members would reasonably require and expect to be given to make an informed decision about the proposed modification.

CLAUSE 32   - REGISTRATION OF DISCLOSURE STATEMENT  

32(1)    
ASIC must register the disclosure statement if satisfied that the statement adequately sets out or explains the following (if relevant):

(a) the variation or cancellation of members ' rights;

(b) that the proposed modification will allow the variation or cancellation of members ' rights;

(c) (Repealed)

(d) what financial benefits (if any) members will be offered if the proposed modification occurs and why the benefits are considered to be appropriate;

(e) the basis upon which members ' entitlement to the financial benefits will be determined, including:

(i) any minimum period of membership that a member must satisfy to receive benefits; or

(ii) whether members must pay an amount or provide other value to receive benefits;

(f) any preferential allocation of benefits to members, or a class of members, and how that allocation is to be determined;

(g) any benefits officers of the company (including retiring officers) may receive (whether directly or indirectly) in connection with the proposed modification;

(h) any other proposed changes to the company that are related to the proposed modification (for example, whether the company proposes to list its securities for quotation on a prescribed financial market or merge with another company);

(i) the new name of the company, if the company ' s name is to be changed in connection with the proposed modification, or that it is not proposed to change the company ' s name;

(j) the procedural steps required to vary or cancel the members ' rights;

(k) (Repealed)

(l) how voting on the proposed modification will take place.

32(2)    
In deciding whether the disclosure statement adequately sets out or explains the matters in subclause (1), ASIC may also have regard to:

(a) the readability of the statement; and

(b) whether the statement would be readily comprehensible by the members of the company concerned.

32(3)    
The disclosure statement must include a statement to the effect that registration of the disclosure statement:

(a) is on the basis that the statement adequately sets out or explains the matters in subclause (1); and

(b) does not mean that ASIC has considered whether the proposed modification is in the best interests of the members of the company as a whole.

32(4)    
Subclause (1) does not limit clause 31.

CLAUSE 33   - EXPERT ' S REPORT  

33(1)    
If the company obtains 2 or more reports each of which could be used for the purposes of paragraph 29(4)(c), a copy of each report must:

(a) be lodged with ASIC; and

(b) be given to each member entitled to receive a disclosure statement.

Penalty: 6 months imprisonment.

33(2)    
The report must be by an expert who is not an associate of the company.

33(3)    
The report must set out details of:

(a) any relationship between the expert and the company, including any circumstances in which the expert gives it advice, or acts on its behalf, in the proper performance of the functions attaching to the expert ' s professional capacity or business relationship with the company; and

(b) any financial or other interest of the expert that could reasonably be regarded as being capable of affecting the expert ' s ability to give an unbiased opinion; and

(c) any fee, payment or other benefit (whether direct or indirect) that the expert has received or will or may receive in connection with making the report.

CLAUSE 34   - UNCONSCIONABLE CONDUCT IN RELATION TO DEMUTUALISATIONS  

34(1)    
A person must not engage in:

(a) conduct that is, in all the circumstances, unconscionable; or

(b) conduct that is misleading or deceptive or is likely to mislead or deceive;

in relation to:

(c) a modification of the constitution of an unlisted company that is a modification to which this Part applies; or

(d) anything done in reliance on, in conjunction with or in connection with the modification.

(e) (Repealed)

34(2)    
In determining whether a person has engaged in conduct that contravenes paragraph (1)(a), have regard to:

(a) whether the person, or someone acting for the person, exerted undue influence or pressure on, or used unfair tactics against, members of the company; and

(b) whether the person, or someone acting for the person, engaged in conduct that resulted in a member or someone else gaining, or being in a position to gain, a benefit that the members generally did not, or would not be in a position to, gain.

This subclause does not limit subclause (1).

34(3)    
A person who contravenes subclause (1) is not guilty of an offence.

CLAUSE 35   - ORDERS THE COURT MAY MAKE  

35(1)    
Without limiting the Court ' s powers under Part 9.5, if the Court is satisfied that a person has engaged in conduct constituting a contravention of subclause 34(1), the Court may make 1 or more of the following orders:

(a) an order requiring the person or a person involved in the contravention to disclose to the public, to a particular person or to a particular class of persons, in the manner specified in the order, specified information, or information of a specified kind, (being information that is in the possession of the person to whom the order is directed or to which that person has access);

(b) an order requiring the person or a person involved in the contravention to publish, at their own expense, in a manner and at times specified in the order, advertisements the terms of which are specified in, or are to be determined in accordance with, the order;

(c) any order that it thinks necessary or desirable:

(i) to protect the rights or interests of any person affected by the conduct; or

(ii) to ensure, as far as possible, that a proposed modification proceeds in the manner in which it would have proceeded if the conduct had not been engaged in;

(d) without limiting the generality of paragraph (c):

(i) an order prohibiting the exercise of voting or other rights attached to specified shares; or

(ii) an order directing a company not to make payment, or to defer making payment, of any amount or amounts due from the company in respect of specified shares; or

(iii) an order prohibiting the acquisition or disposal of, or of an interest in, specified shares; or

(iv) an order directing the disposal of, or of an interest in, specified shares; or

(v) an order directing a company not to register a transfer or transmission of specified shares; or

(vi) an order that an exercise of the voting or other rights attached to specified shares be disregarded; or

(vii) an order directing a company not to issue shares to a person who holds shares in the company, being shares that were proposed to be issued to the person because the person holds shares in the company or pursuant to an offer or invitation made or issued to the person because the person holds shares in the company.

35(2)    
Without limiting the Court ' s powers under Part 9.5, if, in a proceeding, the Court is satisfied that:

(a) a person has engaged in conduct constituting a contravention of subclause 34(1); and

(b) a member of the company has suffered, or is likely to suffer, loss or damage because of that conduct;

the Court may make the orders that it thinks are appropriate to compensate the member (in whole or in part) or to prevent or reduce the loss or damage, including:

(c) an order directing the person or a person who was involved in the contravention to refund money or return property to the member; and

(d) an order directing the person or a person who was involved in the contravention to pay to the member the amount of the loss or damage; and

(e) an order listed in paragraph (1)(d).

35(3)    
An application for an order under this clause may be made by ASIC or a member of the company.