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CO-OPERATIVE SCHEME LEGISLATION AMENDMENT ACT 1989 No. 92 of 1989 - SECT 16
16. After section 133 of the Principal Act the following Division is inserted:
"Division 3A - Permitted Buy-backs of Shares
"Subdivision A - How this Division Works Outline of structure
"133AA. (1) Subdivision C creates exceptions to the section 129 prohibition on
a company acquiring its own shares or interests in its own shares.
"(2) These permitted acquisitions of ordinary shares are called 'buy-backs', a
term defined in Subdivision B along with most of the Division's other
terminology.
"(3) Buy-backs are permitted subject to:
(a) a condition prescribed by Subdivision D, which applies to all
buy-backs of shares; and
(b) conditions prescribed by Subdivisions E, G, H, J, L, M and N, each
condition applying to a specified kind of buy-back.
"(4) Subdivision F prescribes no conditions, but sets out what a buy-back
scheme is and contains rules about such schemes. Buy-back schemes are central
to many provisions of the Division.
"(5) Each of the Subdivisions prescribing conditions contains:
(a) at least one condition, usually only at the beginning of the
Subdivision, but in the case of Subdivision L also at the end; and
(b) ancillary provisions about the subject matter of the condition or
conditions.
"(6) The ancillary provisions relating to some of the conditions in
Subdivision J are in Subdivision K.
"(7) The other Subdivisions contain further ancillary provisions and rules
about the consequences of buy-backs and about the effect of certain events on
buy-backs.
"Subdivision B - Interpretation
Effect of Subdivision
"133BA. This Subdivision has effect for the purposes of this Division, except
so far as the contrary intention appears in this Division. Interpretation
"133BB. Unless the contrary intention appears:
'auditor', in relation to a company, means:
(a) if Part VI requires the company to have an auditor - the auditor of
the company for the purposes of that Part; or
(b) otherwise - a person who is entitled to act as auditor of the company
for those purposes;
'buy' includes agree to buy;
'buy back' has the meaning given by section 133BC;
'buy-back' means an acquisition by a company constituted by the company buying
back shares;
'buy-back authorisation', in relation to a company, means a provision to the
effect that the company may buy ordinary shares in itself, being a provision
contained, or proposed to be inserted, as the case requires, in the company's
articles;
'buy-back offer' means any of the offers constituting a buy-back scheme;
'buy-back scheme' means offers that by virtue of section 133FB constitute a
buy-back scheme;
'class', in relation to shares, has a meaning affected by sections 133BM and
133FA;
'completed' has a meaning affected by section 133BK;
'compliance certificate' means a certificate given for the purposes of section
133SA;
'distributable profits' means profits that are available for dividends;
'employee-shares purchase' means a buy-back of shares where:
(a) immediately before the buy-back, shares (in this definition called the
'relevant shares') being or including the firstmentioned shares were
held by, or for the benefit of, particular persons; and
(b) each of those persons was, on the last occasion when any of the
relevant shares began to be held by or for the benefit of the person
(whether alone or jointly with any other person or persons), a
participating employee in relation to the company; even if some or all
of those persons are no longer such employees;
'entitled' means entitled for the purposes of the Companies (Acquisition of
Shares) Act 1980 ;
'externally-administered company' means a company:
(a) in respect of which a provisional liquidator has been appointed and
not since removed;
(b) that is being wound up; or
(c) that is under official management;
'listed body' means a body corporate that is included in an official list of a
securities exchange;
'marketable parcel', in relation to shares in a listed body, means:
(a) if the body is included in an official list of the Exchange - a
marketable parcel of shares in the body within the meaning of the
Exchange's rules; or
(b) in any other case - the smallest number of shares in the body that
constitute a marketable parcel of such shares within the meaning of
the rules of a securities exchange (other than the Exchange) in an
official list of which the body is included;
'modifications' includes additions, omissions and substitutions;
'national newspaper' means a daily newspaper that circulates generally in each
State, the Territory and the Northern Territory;
'non-cash consideration' means consideration other than money;
'notifiable exchange', in relation to a listed body, means:
(a) if the body is included in an official list of the Exchange - the
securities exchange designated to the company, for the purposes of the
rules of the Exchange relating to the conduct of bodies so included,
as the body's Home Exchange; and
(b) in any case - each securities exchange (other than the Exchange) in an
official list of which the body is included;
'odd lot', in relation to shares in a listed body, means shares in the listed
body that are fewer in number than one marketable parcel of such shares;
'odd-lot purchase' means a buy-back by a listed body of an odd lot of shares
in the body;
'offer period', in relation to an offer made under a buy-back scheme, means
the period during which the offer remains open or, if the offer has been
accepted, would have remained open had it not been accepted;
'ordinary resolution' means a resolution other than a special resolution;
'partly-paid share' means a share on which an amount (including an amount of
premium) remains unpaid;
'provide', in relation to consideration, includes pay;
'purchase' includes an agreement to buy;
'relevant date', in relation to a winding up of a company, means:
(a) in the case of a company ordered to be wound up by a court that has
not previously commenced to be wound up voluntarily - the date of the
winding up order; or
(b) otherwise - the date of the commencement of the winding up;
'resolution' includes a special resolution;
'rights offer or invitation', in relation to a body corporate, means a share
offer made, or a share invitation issued, by the body to members of the body
and to no other person;
'rule', in relation to a securities exchange, means a provision of:
(a) the constituent documents of the securities exchange; or
(b) any other rules, regulations or by-laws:
(i) made by the securities exchange; or
(ii) made by another person and adopted by the securities exchange;
'securities exchange' means the Exchange or a body corporate (wherever
incorporated) that is declared by the regulations to be a securities exchange
for the purposes of this Division;
'seller's claim', in relation to a company, means a claim in respect of
obligations of the company under an agreement constituting a buy-back by th
company;
'share invitation', in relation to a body corporate, means an invitation to
apply or offer to subscribe for or buy ordinary shares in the body that is
issued by the body or on its behalf;
'share offer', in relation to a body corporate, means an offer of ordinary
shares in the body for subscription or purchase that is made by the body or on
its behalf;
'shares', in Subdivision F, has a meaning affected by section 133FA;
'solvency declaration' has the meaning given by section 133BH;
'solvency period', in relation to an offer made under a buy-back scheme, means
the period beginning at the start of the offer period and ending when the
company first provides consideration that it is to provide under an agreement
resulting from the acceptance of an offer made under the buy-back scheme;
'solvent', in relation to a company, means able to pay all its debts as and
when they become due and payable;
'takeover aspects' has the meaning given by section 133BF;
'terms' includes conditions;
'trading' has the same meaning as in the Companies (Acquisition of Shares)
Act 1980 ;
'trading day', in relation to a securities exchange, means a day on which a
stock market of the securities exchange is open for trading in securities;
'transfer' has a meaning affected by section 133BL. What constitutes buying
back shares
"133BC. Where a company buys shares in itself, it shall be taken to buy back
the shares. The 10% in 12 months limit
"133BE. A buy-back of shares exceeds the 10% in 12 months limit if, and only
if, the number calculated in accordance with the following formula exceeds 10:
Buy-backs X 100
--------------------------------------------------;
(Initial shares + New issues - Cancelled shares) where:
Buy-backs is the aggregate nominal value of all ordinary shares that the
company bought back during the period of 12 months ending on the day of the
first-mentioned buy-back;
Initial shares is the aggregate nominal value of all the issued ordinary
shares, as at the start of that period, in the company;
New issues is the aggregate nominal value of all ordinary shares that the
company issued during that period;
Cancelled shares is the aggregate nominal value of all ordinary shares in the
company that were cancelled during that period otherwise than by force of
subsection 133PC (1). Takeover aspects of proposed resolution
"133BF. (1) A notice that sets out the intention to propose a resolution of a
company sets out the takeover aspects of the proposed resolution if, and only
if, the notice complies with this section.
"(2) It shall set out whether or not, as at the time when it is prepared, any
of the company's directors is aware of:
(a) a proposal by a person:
(i) to acquire, or to increase the extent of, a substantial
interest in the company; or
(ii) without limiting the generality of subparagraph (i), to make a
takeover bid in relation to shares in the company; or
(b) a takeover bid that has been made by a person in relation to shares in
the company and offers under which remain open as at that time.
"(3) If any of the directors is so aware, the notice shall set out:
(a) whether or not such a proposal or takeover bid has influenced the
decision to propose the resolution; and
(b) if so - particulars of:
(i) each proposal and takeover bid concerned; and
(ii) the extent to which each has influenced that decision. When
directors presumed to be aware of proposed or actual takeover
bid
"133BG. (1) Where a person who proposes to make a takeover bid in relation to
shares in a company has:
(a) made a public announcement to the effect that the person proposes to
make the takeover bid; or
(b) served on the company a Part A statement within the meaning of the
Companies (Acquisition of Shares) Act 1980 relating to the proposed
takeover bid; a director of the company shall, unless the contrary is
established, be presumed to be aware of the proposal.
"(2) A director of a company shall, unless the contrary is established, be
presumed to be aware of a takeover bid that a person has made in relation to
shares in the company.
"(3) Where:
(a) a person has made a takeover bid in relation to shares in a company;
and
(b) a director of the company was aware that the person proposed to make,
but is not aware that the person has made, the takeover bid;
subsection 133BF (2) and paragraph 133GA (b) apply in relation to the
director, in relation to the takeover bid, as if the person had not
made, but still proposed to make, the takeover bid. Solvency
declaration
"133BH. (1) A solvency declaration by a company's directors is a declaration
in writing that:
(a) is signed in person by everyone who, on the day on which the
declaration is first signed by a director of the company, is such a
director;
(b) specifies that day;
(c) states to the effect that it is the directors' opinion that the
company was solvent on that day;
(d) specifies each buy-back scheme that related to shares in the company
and:
(i) offers under which remained open; or
(ii) agreements resulting from the acceptance of offers under which
remained uncompleted; as at that day;
(e) specifies each agreement that:
(i) constituted a buy-back made by the company otherwise than under
a buy-back scheme; and
(ii) remained uncompleted as at that day;
(f) specifies, as at that day:
(i) each proposed buy-back scheme (if any) under which the company
proposed to make offers during the period of 12 months starting
on that day; and
(ii) each buy-back that the company proposed to make, otherwise than
under a buy-back scheme, during that period; and
(g) states to the effect that it is the directors' opinion that the
company will remain solvent throughout that period even if:
(i) each buy-back offer (if any) that related to shares in the
company and remained open as at that day is accepted, and the
resulting agreement completed, during that period;
(ii) each agreement (if any) that resulted from the acceptance of a
buy-back offer relating to such shares and remained uncompleted
as at that day is completed during that period;
(iii) each agreement (if any) of the kind referred to in paragraph
(e) is completed during that period;
(iv) all offers made under each such proposed buy-back scheme (if
any) are accepted, and the resulting contracts completed,
during that period; and
(v) each such proposed buy-back (if any) is made during that
period.
"(2) Each director of a company who signs a solvency declaration by the
company's directors shall be taken to have stated in it that he or she had,
when signing the declaration, the opinions described in it.
"(3) A solvency declaration by a company's directors shall be taken to have
been made on the day specified in it under paragraph (1) (b).
"(4) Unless sooner revoked under section 133MD, a solvency declaration by a
company's directors remains in force for 12 months starting on the day on
which it is made.
"(5) A solvency declaration by a company's directors relates to a buy-back
scheme or buy-back if, and only if, the declaration specifies the buy-back
scheme or buy-back under paragraph (1) (d) or (e).
"(6) In subsection (5):
'buy-back' includes a proposed buy-back;
'buy-back scheme' includes a proposed buy-back scheme. Auditor's report on
solvency declaration
"133BJ. An auditor's report on a solvency declaration by a company's directors
is a report in writing that:
(a) the company's auditor prepares, signs and dates, and sends to the
company, on or after the day when the declaration is made;
(b) sets out a statement to the effect that the auditor has inquired into
the company's state of affairs and is aware of nothing to indicate
that it is unreasonable in all the circumstances to form the opinions
described in the declaration; and
(c) sets out:
(i) such explanations (if any), and such information (if any),
relevant to the statement referred to in paragraph (b); and
(ii) such other information (if any); as the auditor thinks
necessary, other than an explanation, or information, that
contradicts, qualifies or is otherwise inconsistent with that
statement. when buy-back agreement is completed
"133BK. An agreement constituting a buy-back by a company is completed when
the company has provided all the consideration that it is to provide under the
agreement. When shares are transferred
"133BL. Shares in a body corporate are transferred pursuant to an agreement
when the transfer of the shares pursuant to the agreement is registered by the
body. Classes of shares
"133BM. The shares in a company, if not divided into 2 or more classes,
constitute a class.
"Subdivision C - Power to Buy Back Shares Power to buy back shares
"133CA. (1) A company may buy back ordinary shares if, and only if, the
conditions prescribed by this Division are satisfied.
"(2) The power conferred by subsection (1) may only be exercised by the
directors.
"(3) The order in which this Division prescribes conditions does not indicate
that the conditions must be satisfied in a particular order. Completion of
buy-back
"133CB. Subject to this Division (other than section 133CA), where a company
buys back shares as permitted by section 133CA, the shares may be transferred
to the company pursuant to the buy-back. Effect of Division
"133CC. (1) This Division has effect despite:
(a) Subdivisions C and D of Division 3;
(b) section 11 of the Companies (Acquisition of Shares) Act 1980;
(c) the constituent documents, or a resolution, of a company;
(d) the rules of a securities exchange; or
(e) any agreement.
"(2) Without limiting the generality of subsection (1), a buy-back or transfer
permitted by section 133CA or 133CB does not contravene any of the provisions
referred to in paragraphs (1) (a) and (b) of this section.
"(3) Nothing in this Division affects section 82.
"(4) Shares bought back as permitted by section 133CA shall, so long as the
rights attached to them are suspended because of section 133PA, be disregarded
in ascertaining, for the purposes of the
Companies (Acquisition of Shares) Act 1980 , the shares, or the voting
shares, as the case requires, in which the company has a relevant interest or
relevant interests.
"(5) Sections 133PA and 133PB shall be disregarded in determining, for the
purposes of Division 4, whether or not a person has a relevant interest in
particular shares. Other obligations and liabilities not affected
"133CD. (1) Except as expressly provided in this Division, nothing in this
Division affects an obligation, or a liability (whether civil or criminal),
arising otherwise than under this Division.
"(2) Without limiting the generality of subsection (1), nothing in this
Division relieves a director of any duty to the company, whether arising under
section 229 or otherwise and whether of a fiduciary nature or not.
"Subdivision D - Buy-back Authorisation in Articles Articles to contain
buy-back authorisation
"133DA. (1) The first condition is that the company's articles contain a
buy-back authorisation at the relevant time.
"(2) For the purposes of subsection (1), the relevant time is:
(a) if the buy-back is made under a buy-back scheme but section 133GA does
not apply - when the first offer is made under the buy-back scheme;
(b) if section 133GA, 133HA, 133JA or 133JB applies - when the resolution
for which that section provides is passed; or
(c) in any other case - the time of the buy-back. Inclusion, effect and
renewal of buy-back authorisation
"133DB. (1) In this section:
'renew', in relation to a buy-back authorisation, means renew under subsection
(4);
'requirement', in relation to a company, includes a requirement of a law or of
the company's constituent documents.
"(2) A company's buy-back authorisation, unless sooner omitted from the
company's articles, ceases to have effect at the end of:
(a) if the articles provide that the buy-back authorisation has effect for
a specified period of less than 3 years and the buy-back authorisation
has not been renewed - the specified period;
(b) if the buy-back authorisation has been renewed on at least one
occasion and the resolution, or the later or last of the resolutions,
as the case requires, renewing it states that it is renewed for a
specified period of less than 3 years - the specified period; or
(c) otherwise - 3 years; beginning:
(d) if the buy-back authorisation was contained in the articles at the
time when the company was incorporated and has not been renewed - at
that time;
(e) if the buy-back authorisation was inserted in the articles and has not
been renewed - at the time when it was so inserted; or
(f) if the buy-back authorisation has been renewed on at least one
occasion - at the time when the buy-back authorisation was last
renewed.
"(3) Where a company's buy-back authorisation ceases to have effect, the
company's articles are, by force of this subsection, altered by omitting the
buy-back authorisation.
"(4) A company may renew its buy-back authorisation in any manner in which it
may alter its articles by inserting a buy-back authorisation and shall, in
relation to a renewal of its buy-back authorisation, comply with the
requirements that apply in relation to such an alteration of its articles,
being an alteration in the manner in which the renewal is effected.
"(5) A company shall, with every notice that:
(a) sets out the intention to propose:
(i) a resolution for the alteration of the company's articles by
inserting a buy-back authorisation; or
(ii) a resolution to renew its buy-back authorisation; and
(b) is sent to a person who is entitled to vote on the proposed
resolution; send a statement that:
(c) states to the effect that the consequence of the proposed alteration
or renewal is to empower the company, during the period during which
the buy-back authorisation is in effect, to buy ordinary shares in
itself as provided in this Division;
(d) explains the reasons for proposing the resolution and sets out the
factual matters and principles underlying those reasons;
(e) if subparagraph (a) (ii) applies - reviews the buy-backs (if any) of
shares by the company since the buy-back authorisation took effect, or
was last renewed, as the case requires, and the effects of those
buy-backs (if any) on the company and on the directors, and the
members, of the company, respectively;
(f) discusses both the potential advantages, and the potential
disadvantages, of the proposed buy-back authorisation, or of the
buy-back authorisation proposed to be renewed, as the case may be, for
the company and for the directors, and the members, of the company,
respectively.
"(6) Where a company contravenes subsection (4), the company and any officer
of the company who is in default are each guilty of an offence.
Penalty: $5,000 or imprisonment for 12 months, or both.
"Subdivision E - Buy-backs by Public Companies Only certain buy-backs
permitted
"133EA. If the company is a public company, the next condition is that the
buy-back:
(a) does not exceed the 10% in 12 months limit; or
(b) is an employee-shares purchase or an odd-lot purchase.
"Subdivision F - Buy-back Schemes
Shares and classes of shares
"133FA. (1) Except so far as the contrary intention appears, a reference in
this Subdivision to shares is a reference to ordinary shares.
"(2) Where the shares in a company are divided into 2 or more classes, the
provisions of this Subdivision (other than this subsection and subsection
133FB (10)) apply in relation to each of those classes:
(a) as if the shares in that class were the only shares in the company;
and
(b) without prejudice to their application by force of this subsection in
relation to any other class of shares. Buy-back scheme
"133FB. (1) A buy-back is made under a buy-back scheme if, and only if, it
results from the acceptance of an offer made under the buy-back scheme.
"(2) An offer is made under a buy-back scheme if, and only if, it is one of
the offers constituting the buy-back scheme.
"(3) Offers by a company to buy back shares constitute a buy-back scheme if,
and only if, the following requirements of this section are complied with.
"(4) Each offer must be in writing.
"(5) Each offer must have the same date, being a date that is not earlier than
3 days before the day on which the offer is sent and not later than that day.
"(6) Each offer must state that it will, unless withdrawn, remain open during
a period ending on a specified day that is not earlier than one month, nor
later than 6 months, after the date of the offer.
"(7) Each offer must specify the consideration that under the offer is to be
provided for the buy-back of each share to which the offer relates.
"(8) Each offer must set out how and when the company's obligations are to be
satisfied.
"(9) The offers must relate only to shares in the company.
"(10) Each offer must specify, in relation to each class of shares (including
shares other than ordinary shares) in the company:
(a) the total number of shares in the class as at the time immediately
before the first of the offers is sent; and
(b) in the case of a class of ordinary shares - the number of shares (if
any) in the class that, as at that time, have been bought back but not
yet cancelled (which may be expressed as a number of shares or as a
percentage of the number referred to in paragraph (a)).
"(11) Each offer must relate to a proportion of the shares in the company that
the offeree holds and that proportion must be the same in respect of each
offer.
"(12) The offers must be the same disregarding:
(a) the fact that the number of shares that may be acquired under each
offer is limited by the number of shares held by the offeree; and
(b) any differences in the consideration specified for each share in the
offers that are attributable only to one or both of the following:
(i) the fact that the offers relate to shares having different
accrued dividend entitlements;
(ii) the fact that the offers relate to shares on which different
amounts (whether by way of capital or premium) are paid up.
"(13) The offeror must send an offer in an approved manner to each person who
holds shares in the company when the first of the offers is sent.
"(14) Section 8A of the Companies (Acquisition of Shares) Act 1980 has effect
for the purposes of subsection (13) of this section as if that subsection were
a provision of that Act. Withdrawal or variation of buy-back offers
"133FC. A buy-back offer is not capable of being withdrawn or varied without
the Commission's written consent, which may be given subject to such
conditions (if any) as are specified in it. Avoiding odd lots
"133FD. Where, at a particular time:
(a) an offer has been made under a buy-back scheme;
(b) the company is a listed body;
(c) the offer is accepted; and
(d) a proportion of the shares, being the proportion to which the offer
does not relate, consists of an odd lot of shares or consists of a
marketable parcel or marketable parcels of shares and an odd lot of
shares; the offer shall, except for the purposes of subsection 133FB
(11) and this section, be taken always to have related to, to relate
to, and to have been accepted in relation to, a number of shares in
the company equal to the sum of:
(e) the number of shares of which the proportion to which the offer
relates consists; and
(f) the number of shares in that odd lot. Odd lots to be disregarded for
purposes of 10% in 12 months limit
"133FE. (1) This section applies where, because of section 133FD, an offer
made by a listed body under a buy-back scheme is taken to have been accepted
in relation to a number of shares in the body equal to the sum of a particular
number of such shares and the number of shares in an odd lot of such shares.
"(2) In determining whether or not a buy-back made under the buy-back scheme
exceeds the 10% in 12 months limit, the odd lot shall be taken not to have
been bought back.
"Subdivision G - Approval of Buy-back Schemes by Ordinary Resolution When
approval required
"133GA. If the buy-back is made under a buy-back scheme and:
(a) if the company is a proprietary company - the buy-back exceeds the 10%
in 12 months limit; or
(b) in any case - at the time when the first offer was made under the
buy-back scheme, at least one of the company's directors was aware of:
(i) a proposal by a person to make a takeover bid in relation to
shares in the company; or
(ii) a takeover bid that had been made by a person in relation to
shares in the company and offers under which remained open at
that time; the next condition is that the buy-back offers were
made under an ordinary resolution of the company. Buy-back
offers made under a resolution
"133GB. Buy-back offers are made under a particular resolution if, and only
if:
(a) the resolution:
(i) approves the buy-back scheme constituted by the offers;
(ii) complies with section 133GC; and
(iii) was passed at a meeting held before the first offer was made
under the buy-back scheme;
(b) the offers are in accordance with the resolution; and
(c) such of the terms of the offers as are not specified in the resolution
are not materially different from the terms particulars of which were
specified under subsection 133GD (2) in notices relating to the
resolution that were sent for the purposes of the meeting. Resolution
to approve proposed buy-back scheme
"133GC. (1) A resolution of a company that is passed at a meeting and approves
a proposed buy-back scheme complies with this section if, and only if:
(a) every notice of the meeting sent to a person entitled to vote on the
resolution set out, or was accompanied by a notice setting out:
(i) the intention to propose the resolution; and
(ii) the matters required by section 133GD; and
(b) the resolution complies with subsection (2) of this section.
"(2) The resolution shall specify:
(a) the latest date that the proposed buy-back offers may have for the
purposes of subsection 133FB (5), being a date at most 12 months after
the day on which the resolution is passed;
(b) the minimum period, being at least one month and at most 6 months,
during which the offers are to remain open unless they are withdrawn;
(c) the consideration, or each alternative consideration included in the
consideration, as the case requires, that under each of the offers is
to be provided for the buy-back of each share to which the offer
relates; and
(d) the proportion to be specified in the offers for the purposes of
subsection 133FB (11).
"(3) A resolution may specify a consideration under paragraph (2) (c) as a
consideration to be determined by the directors, being:
(a) not less than a minimum consideration specified in the resolution; and
(b) not more than a maximum consideration so specified.
"(4) A resolution may specify a consideration under paragraph (2) (c) or (3)
(a) or (b) as a consideration to be determined by the directors in a manner
specified in the resolution.
"(5) A resolution of a company to approve a proposed buy-back scheme may
require specified terms to be included in the proposed buy-back offers. Notice
of resolution to approved proposed buy-back scheme
"133GD. (1) A notice that:
(a) sets out the intention to propose a resolution to approve a proposed
buy-back scheme; and
(b) is sent to a person entitled to vote on the resolution; shall comply
with this section.
"(2) It shall set out the text of the proposed resolution and full particulars
of such of the terms of the proposed buy-back offers as are not specified in
the resolution.
"(3) It shall set out the reasons why the buy-back scheme is being proposed
and the facts and principles underlying those reasons.
"(4) It shall set out the takeover aspects of the proposed resolution.
"(5) It shall set out what the directors consider will be the likely effect on
the company's state of affairs if the offers are made and all are accepted.
"(6) It shall set out a copy of a solvency declaration by the directors that
relates to the proposed buy-back scheme and was made within 7 days before the
day on which the notice is prepared.
"(7) It shall state whether or not there are, at the time when it is prepared,
partly-paid shares in the company that are in the same class as the shares to
which the proposed buy-back offers relate and, if there are, the notice shall
set out:
(a) how many such partly-paid shares there are at that time; and
(b) the total of all amounts (including amounts of premium) that at that
time remain unpaid on such partly-paid shares.
"(8) It shall set out, in relation to each person who, at the time when the
notice is prepared, is a director of the company or is associated with such a
director:
(a) whether or not the person intends at that time, if:
(i) the resolution is passed in a form not substantially different
from that set out in the notice;
(ii) buy-back offers are made under the resolution; and
(iii) the person holds shares in the company when the offers are
made; to accept the offer made to the person under the buy-back
scheme; or
(b) if the person has not decided whether or not the person so intends -
that the person has not so decided.
"(9) It shall set out all other information that is known to any of the
directors and may reasonably be expected to influence a person in deciding
whether or not to vote in favour of the resolution.
"(10) The notice shall be the same as each of the other notices of the kind
referred to in subsection (1) that relate to the resolution, disregarding the
fact that the first-mentioned notice is sent to a different person.
"Subdivision H - Employee-shares Purchases Approval by ordinary resolution
"133HA. If the buy-back is an employee-shares purchase and exceeds the 10% in
12 months limit, the next conditions are:
(a) that:
(i) if the company has an approving holding company or approving
holding companies - the company, and that holding company or
those holding companies, have each; or
(ii) otherwise - the company has; approved the buy-back by an
ordinary resolution passed at a meeting of the company or
holding company held before the agreement constituting the
buy-back is entered into;
(b) that each of the resolutions, or the resolution, as the case may be,
complies with section 133HB;
(c) that the agreement is in accordance with each of the resolutions, or
the resolution, as the case may be; and
(d) that such of the terms of the agreement as:
(i) are specified in none, or in at least one but not all, of the
resolutions; or
(ii) are not specified in the resolution; as the case may be, are
not materially different from the terms particulars of which
were specified under subsection 133HC (2) in notices relating
to the resolutions or resolution that were sent for the
purposes of the meetings or meeting. Resolution to approve
proposed employee-shares purchase
"133HB. (1) A resolution of a corporation that is passed at a meeting and
approves a proposed employee-shares purchase complies with this section if,
and only if:
(a) every notice of the meeting sent to a person entitled to vote on the
resolution set out, or was accompanied by a notice setting out:
(i) the intention to propose the resolution; and
(ii) the matters required by section 133HC;
(b) the resolution specifies the consideration, or each alternative
consideration included in the consideration, as the case requires,
that under the agreement constituting the proposed purchase is to be
provided for the purchase; and
(c) no votes are cast, in relation to the resolution, in respect of any
shares held by:
(i) a party to the agreement (other than the company that proposes
to make the purchase or a holding company of that company); or
(ii) a person associated with such a party.
"(2) A resolution may specify a consideration under paragraph (1) (b) as a
consideration to be determined by the directors, being:
(a) not less than a minimum consideration specified in the resolution; and
(b) not more than a maximum consideration so specified.
"(3) A resolution may specify a consideration under paragraph (1) (b) or (2)
(a) or (b) as a consideration to be determined by the directors in a manner
specified in the resolution.
"(4) A resolution of a corporation to approve a proposed employeeshares
purchase may require specified terms to be included in the agreement
constituting the purchase. Notice of resolution to approve proposed
employee-shares purchase
"133HC. (1) A notice that:
(a) sets out the intention to propose a resolution of a corporation to
approve a proposed employee-shares purchase; and
(b) is sent to a person entitled to vote on the resolution; shall comply
with this section.
"(2) It shall set out the text of the proposed resolution and full particulars
of such of the terms of the agreement constituting the proposed purchase as
are not specified in the resolution.
"(3) It shall set out the reasons why the purchase is being proposed and the
facts and principles underlying those reasons.
"(4) It shall set out, in relation to each person by whom, or for whose
benefit, shares to which the proposed purchase relates are held:
(a) the person's name; and
(b) particulars of the employment by virtue of which the person is a
participating employee in relation to the corporation, or was such an
employee immediately before the person last ceased to be such an
employee, as the case requires.
"(5) It shall set out:
(a) how many of the shares to which the proposed purchase relates are
partly-paid shares at the time when the notice is prepared; and
(b) the total of all amounts (including amounts of premium) that at that
time remain unpaid on the first-mentioned shares.
"(6) If the proposed purchase relates to shares in the corporation, the notice
shall set out:
(a) the takeover aspects of the proposed resolution;
(b) what the directors consider will be the likely effect on the
corporation's state of affairs if the purchase is made; and
(c) a copy of a solvency declaration by the directors that relates to the
proposed purchase and was made within 7 days before the day on which
the notice is prepared.
"(7) If the proposed purchase relates to shares in a subsidiary of the
corporation, the notice shall set out:
(a) what the subsidiary's directors consider will be the likely effect on
the subsidiary's state of affairs if the purchase is made;
(b) a copy of a solvency declaration by the subsidiary's directors that
relates to the proposed purchase and was made within 7 days before the
day on which the notice is prepared; and
(c) what the corporation's directors consider will be the likely effect on
the corporation's state of affairs if the purchase is made.
"(8) The notice shall set out all other information that is known to any of
the directors referred to in subsection (6) or (7), as the case may be, and
may reasonably be expected to influence a person in deciding whether or not to
vote in favour of the resolution.
"(9) The notice shall be the same as each of the other notices of the kind
referred to in subsection (1) that relate to the resolution, disregarding the
fact that the first-mentioned notice is sent to a different person.
"Subdivision J - Selective Buy-backs Approval by special resolution passed by
special majority, of selective buy-back by public company
"133JA. If:
(a) the company is a public company; and
(b) the buy-back is not made under a buy-back scheme and is neither an
employee-shares purchase nor an odd-lot purchase; the next conditions
are:
(c) that, before it is entered into, the agreement constituting the
buy-back is approved by a special resolution of the company passed, at
a meeting, by a majority consisting of:
(i) at least 75% in number of; and
(ii) members who together hold at least 75% in nominal value of the
shares that entitle their holders to attend and vote at the
meeting and are held by; such members of the company as, being
entitled to do so, vote in person or, where proxies are
allowed, by proxy, at the meeting;
(d) that no votes were cast in relation to the resolution in respect of
any shares held by:
(i) a party (other than the company) to the agreement; or
(ii) a person associated with such a party;
(e) that every notice of the meeting that was sent to a person entitled to
vote on the resolution set out, or was accompanied by a notice setting
out:
(i) the intention to propose the resolution; and
(ii) the matters required by Subdivision K;
(f) that, as at the time when the first such notice was so sent, each
expert (if any) who had signed under paragraph 133KD (2) (a) or
subsection 133KE (1) a report of which a copy was set out in such a
notice had given, and had not withdrawn, his or her written consent to
the sending of each such notice with the report set out in the form
and context in which it was in fact set out in each such notice;
(g) that a copy of the agreement as proposed when the first such notice
was so sent was available in accordance with the statement set out in
each such notice as required by section 133KC;
(h) that, apart from the modifications (if any) specified in the
resolution, the terms of the agreement as entered into are not
materially different from the terms of the agreement as so proposed;
and
(j) that those modifications (if any) have been made. Approval by special
resolution where selective buy-back by proprietary company exceeds 10%
in 12 months limit
"133JB. If:
(a) the company is a proprietary company; and
(b) the buy-back is not made under a buy-back scheme, is not an
employee-shares purchase and exceeds the 10% in 12 months limit; the
next conditions are:
(c) that, before it is entered into, the agreement constituting the
buy-back is approved by a special resolution of the company in
relation to which no votes were cast in respect of any shares held by:
(i) a party (other than the company) to the agreement; or
(ii) a person associated with such a party;
(d) that every notice of the meeting at which the resolution was passed
that was sent to a person entitled to vote on the resolution set out,
or was accompanied by a notice setting out:
(i) the intention to propose the resolution; and
(ii) the matters required by Subdivision K;
(e) that a copy of the agreement as proposed when the first such notice
was so sent was available in accordance with the statement set out in
each such notice as required by section 133KC;
(f) that, apart from the modifications (if any) specified in the
resolution, the terms of the agreement as entered into are not
materially different from the terms of the agreement as so proposed;
and
(g) that those modifications (if any) have been made.
"Subdivision K - Notice of Resolution to Approve Proposed Selective
Buy-back Notice must comply with Subdivision
"133KA. A notice that:
(a) sets out the intention to propose at a meeting a resolution of a
company to approve a proposed agreement constituting a proposed
buy-back; and
(b) is sent to a person entitled to vote on the resolution; shall comply
with this Subdivision. Contents of resolution and proposed agreement
"133KB. (1) It shall set out the text of the proposed resolution.
"(2) It shall set out a summary of all material terms of the proposed
agreement. Availability of agreement for inspection
"133KC. It shall set out a statement to the effect that a copy of the proposed
agreement will be available:
(a) at the company's registered office at any time when the office is
required to be open and accessible to the public during the period
starting on a specified day at least 14 days before the day of the
meeting and ending on the day of the meeting; and
(b) at the meeting; for inspection without charge by any person entitled
to vote on the proposed resolution. Valuation of non-cash
consideration
"133KD. (1) This section applies if the consideration that under the proposed
agreement is to be provided for the buy-back consists, or includes at least
one alternative consideration that consists, wholly or partly of noncash
consideration.
"(2) The notice shall set out, in relation to the first-mentioned
consideration or each such alternative consideration, as the case may be,
particulars of the non-cash consideration and:
(a) if the company is a public company - a copy of a report that:
(i) an expert (other than a person associated with the company or
with any other proposed party to the proposed agreement) signed
within 7 days before the notice was prepared;
(ii) sets out what, in his or her opinion, was the money value of
the non-cash consideration when he or she signed the report;
and
(iii) complies with section 133KF; or
(b) otherwise - a copy of a statement that each of the company's directors
signed within 7 days before the notice was prepared and that sets out:
(i) what, in their opinion, was the money value of the non-cash
consideration when the statement was first signed by one of
them; and
(ii) what, in their opinion, will be the money value of the noncash
consideration if and when the agreement is entered into and
completed and, in the case of an alternative consideration, the
seller chooses that alternative.
"(3) If the company is a public company and the opinion of each of 2 or more
experts has been sought about the value of non-cash consideration to which a
particular report of which a copy is set out under subsection (2) relates, the
notice shall set out, in relation to each of those experts (other than the one
who signed the report):
(a) his or her name; and
(b) particulars of the opinions (if any) he or she has expressed about the
value of such non-cash consideration. Expert's opinion about whether
consideration fair and reasonable
"133KE. (1) If the company is a public company, the notice shall set out a
copy of a report that:
(a) an expert (other than a person associated with the company or with any
other proposed party to the proposed agreement) signed within 7 days
before the notice was prepared;
(b) in relation to:
(i) the consideration that under the proposed agreement is to be
provided for the buy-back; or
(ii) each alternative consideration included in that consideration;
as the case requires:
(iii) states whether or not, in his or her opinion, the consideration
was fair and reasonable as at the time when he or she signed
the report; and
(iv) sets out the expert's reasons for forming that opinion;
(c) in relation to each report (if any) that was signed under paragraph
133KD (2) (a) and a copy of which is set out in the notice - states:
(i) to what extent he or she has relied on the report in forming an
opinion for the purposes of paragraph (b) of this subsection;
and
(ii) if he or she has not so relied at all - why not; and
(d) complies with section 133KF.
"(2) If the company is a public company and the opinion of 2 or more experts
has been sought about the consideration referred to in subparagraph (1) (b)
(i) or an alternative consideration included in it, the notice shall set out,
in relation to each of those experts (other than the one who signed the
report):
(a) his or her name; and
(b) particulars of the opinions (if any) he or she has expressed about the
first-mentioned consideration or such an alternative consideration.
"(3) Nothing in this section limits the generality of anything else in it.
Matters affecting expert's objectivity
"133KF. For the purposes of subparagraph 133KD (2) (a) (iii) or paragraph
133KE (1) (d), a report signed by an expert complies with this section if, and
only if, it sets out:
(a) particulars of any relationship of the expert with a person (in this
section called an 'interested person'), being:
(i) the company;
(ii) any other proposed party to the proposed agreement; or
(iii) a person associated with the company or with any other such
proposed party; including, but not limited to, particulars of
circumstances in which the expert furnishes advice to, or acts
on behalf of, an interested person in the proper performance of
the functions attaching to the expert's professional capacity
or to the expert's business relationship with that interested
person;
(b) particulars of any pecuniary 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 on the matters to which
the report relates; and
(c) particulars of:
(i) any fee; and
(ii) any pecuniary or other benefit, whether direct or indirect;
that the expert has received or will or may receive for or in
connection with the making of the report. Expert's consent
"133KG. If the company is a public company, the notice shall set out, in
relation to each report that was signed under paragraph 133KD (2) (a) or
subsection 133KE (1) and of which a copy is set out in the notice, a statement
to the effect that the expert who signed the report has given, and has not
withdrawn, his or her consent to the sending of the notice with the report set
out in the form and context in which it is set out. Reasons for buy-back
"133KH. (1) The notice shall set out the reasons why the buy-back is being
proposed and the facts and principles underlying those reasons.
"(2) The notice shall set out the takeover aspects of the proposed resolution.
Solvency aspects
"133KJ. (1) The notice shall set out what the directors consider will be the
likely effect on the company's state of affairs if the proposed buy-back is
made.
"(2) The notice shall set out a copy of a solvency declaration by the
directors that relates to the proposed buy-back and was made within 7 days
before the day on which the notice is prepared.
"(3) The notice shall set out:
(a) how many of the shares to which the proposed buy-back relates are
partly-paid shares at the time when the notice is prepared; and
(b) the total of all amounts (including amounts of premium) that at that
time remain unpaid on the first-mentioned shares. Directors' interests
"133KK. (1) The notice shall set out, in relation to each of the directors, in
relation to each person who, at the time when the notice is prepared, is
associated with that director in relation to the proposed buy-back:
(a) the name of that person; and
(b) particulars of the circumstances by virtue of which that person is so
associated with that director at that time.
"(2) The notice shall set out each declaration (if any) that, before the
notice was prepared, a director of the company has made under section 228 in
relation to the proposed agreement. Effect on control of company
"133KL. (1) The notice shall set out what the directors consider will be the
likely effect on the control of the company if the proposed buy-back is made.
"(2) The notice shall set out, in relation to each of the directors:
(a) whether or not the directors consider it likely that, if the proposed
buy-back were made and the shares to which it relates were cancelled
immediately afterwards, that director would, immediately after the
cancellation, be entitled to more than 20% of the shares in the
company; and
(b) if so - the respective percentages to which the directors consider it
likely that that director would be entitled immediately before, and
immediately after, the cancellation. Other relevant information
"133KM. The notice shall set out all other information that is known to any of
the directors and may reasonably be expected to influence a person in deciding
whether or not to vote in favour of the resolution. Notices to be the same
"133KN. The notice shall be the same as each of the other notices of the kind
referred to in section 133KA that relate to the meeting and the resolution,
disregarding the fact that the first-mentioned notice is sent to a different
person.
"Subdivision L - Creditors may Object to Proposed Buy-backs Advertising
proposed buy-backs
"133LA. (1) This section applies if:
(a) the buy-back is made under a buy-back scheme;
(b) the company is a proprietary company and the buy-back is not made
under a buy-back scheme and is not an employee-shares purchase; or
(c) the company is a public company and the buy-back is not made under a
buy-back scheme and is neither an employee-shares purchase nor an
odd-lot purchase.
"(2) The next condition is that a notice:
(a) setting out the intention to make the offers constituting the buy-back
scheme, or to enter into the agreement constituting the buy-back, as
the case may be;
(b) specifying the documents referred to in paragraphs (3) (a) and (b)
and, if applicable, paragraph (3) (c);
(c) stating to the effect that those documents would be available as
mentioned in paragraph (3) (a) during the period referred to in
subsection (3); and
(d) setting out the matters required by section 133LB; was published in
accordance with section 133LC on a day that, or on days each of which:
(e) was not earlier than 42 days, and not later than 28 days, before the
day (in this section called the 'critical day') on which the first of
the offers was made, or the agreement is entered into, as the case may
be; and
(f) if section 133GA, 133JA or 133JB applies - was later than the day on
which the resolution for which that section provides was passed.
"(3) The next condition is that, throughout the period starting on the day, or
on the first of the days, when the notice was so published and ending at least
21 days after that day or the last of those days:
(a) a copy of one of the offers, or of the agreement, as proposed on that
day, or on the first of those days, was available for inspection
without charge by any creditor of the company at the company's
registered office at any time during that period when the office was
required to be open and accessible to the public;
(b) a solvency declaration by the company's directors that related to the
buy-back scheme or buy-back and was made not more than 2 months before
the critical day was in force and so available;
(c) unless the company is a proprietary company and the buy-back does not
exceed the 10% in 12 months limit - an auditor's report on the
declaration was so available; and
(d) if section 133GA, 133JA or 133JB applies:
(i) a copy of the resolution for which that section provides; and
(ii) each report or statement (if any) that was signed under
subsection 133KD (2) or 133KE (1) and of which a copy was set
out in a notice that set out the intention to propose the
resolution and was sent to a person entitled to vote on it; was
or were, as the case requires, so available.
"(4) The next condition is that the terms of the offers, or of the agreement,
as so proposed were not materially different from the terms of the offers as
made, or of the agreement as entered into, as the case may be. Content of
advertisement
"133LB. (1) A notice that sets out the intention to:
(a) make offers constituting a buy-back scheme; or
(b) enter into an agreement constituting a buy-back; and is published in
accordance with section 133LC shall comply with this section.
"(2) The notice shall set out:
(a) in relation to the consideration; or
(b) in relation to each alternative consideration included in the
consideration; as the case requires, that under each of the proposed
offers, or under the proposed agreement, as the case may be, is to be
provided for the buy-back of the shares to which the offer or
agreement relates:
(c) the amount of money (if any), and the non-cash consideration (if any),
that under each of the proposed offers, or under the proposed
agreement, as the case may be, is or are to be provided:
(i) as the consideration for each share to which that offer or the
proposed agreement relates; or
(ii) as the consideration for each such share if the offeree or
seller chooses that alternative; as the case may be; and
(d) an amount that it is reasonable to expect will be, if:
(i) all the proposed offers are made and accepted, all resulting
agreements are completed and, if paragraph (b) applies, all
offerees choose that alternative; or
(ii) the proposed agreement is entered into and completed and, if
paragraph (b) applies, the seller chooses that alternative; as
the case may be, the greatest total of:
(iii) the amounts (if any) that the company will have paid for the
buy-backs made under the buy-back scheme, or for the buy-back
constituted by the agreement, as the case may be; and
(iv) the money value, as at the time when the last of those
buy-backs, or that buy-back, as the case may be, is completed,
of the non-cash consideration (if any) that the company will
have provided for the buy-backs or buy-back.
"(3) If paragraph (1) (a) applies, the notice shall state whether or not there
are, at the time when it is prepared, partly-paid shares in the company that
are in the same class as the shares to which the proposed offers relate and,
if there are, the notice shall set out:
(a) how many such partly-paid shares there are at that time; and
(b) the total of all amounts (including amounts of premium) that at that
time remain unpaid on such partly-paid shares.
"(4) If paragraph (1) (b) applies, the notice shall set out:
(a) how many of the shares to which the proposed agreement relates are
partly-paid shares at the time when the notice is prepared; and
(b) the total of all amounts (including amounts of premium) that at that
time remain unpaid on the first-mentioned shares.
"(5) The notice shall set out the effect of section 133LD as it applies in
relation to the proposed buy-back scheme or proposed buy-back, as the case may
be. Newspapers in which advertisement to be published
"133LC. A notice relating to a proposed buy-back scheme or buy-back is
published in accordance with this section if, and only if, a copy of the
notice is published:
(a) in a national newspaper;
(b) if a daily newspaper (other than a national newspaper) circulates
generally in the Territory - in such a newspaper that so circulates;
and
(c) in each State and Territory (other than the Territory) in which the
company carries on business and in which a daily newspaper (other than
a national newspaper) circulates generally, in such a newspaper that
circulates generally in that State or Territory; whether on the same
day or on different days. Creditor may apply to Court
"133LD. Where a copy of a notice relating to a proposed buy-back scheme or
buy-back is published in a newspaper, a creditor of the company:
(a) may apply to the Court at any time within the period of 21 days after
the day, or the last of the days, on which a copy of the notice is
published in a newspaper; and
(b) may, with the leave of the Court, apply to the Court at any time after
that period and before the first of the proposed offers is made, or
the agreement constituting the proposed buy-back is entered into, as
the case may be; for an order prohibiting the making of the offers or
the entering into of the agreement. How application to be dealt with
"133LE. (1) On an application made in accordance with section 133LD, the Court
shall, if satisfied that:
(a) the company is insolvent;
(b) the declaration specified in the notice referred to in that section is
no longer in force; or
(c) it is unlikely that the company will remain solvent as specified in
that declaration; by order prohibit the company, except on such
conditions (if any) as the order specifies, from making the offers or
entering into the agreement, as the case may be, but otherwise shall
refuse the application.
"(2) On application by the company or a creditor of the company, the Court may
by order vary or revoke an order in force under this section.
"(3) An order under this section does not take effect until a copy of it is
served on the company. Buy-backs not to proceed while application pending
"133LF. (1) This section applies if section 133LA applies and notice of an
application made in accordance with section 133LD in relation to the buy-back
offers or the agreement constituting the buy-back, as the case may be, was
served on the company before the time when the first of the offers was made or
when the agreement is entered into.
"(2) The next condition is that:
(a) each such application of which notice was so served; and
(b) each appeal (if any) arising out of such an application of which
notice was so served; was determined or otherwise disposed of before
the time referred to in subsection (1).
"(3) The period beginning on the day when the first notice of such an
application was so served and ending on the day when the last such application
or appeal was determined or otherwise disposed of shall be disregarded in
determining, for the purposes of subsection 133LA (2) and paragraph 133LA (3)
(b), how long before a particular day:
(a) a notice relating to the offers or agreement was published in
accordance with section 133LC; and
(b) a solvency declaration by the company's directors that relates to the
offers or agreement was made. Company to comply with order of Court
"133LG. (1) The next condition is that:
(a) if the buy-back results from the acceptance of an offer made under a
buy-back scheme - the making of the offer; or
(b) otherwise - the entering into of the agreement constituting the
buy-back; did not contravene an order in force under section 133LE.
"(2) Nothing in this section affects the powers of the Court in relation to
punishment of contempts of the Court.
"Subdivision M - Solvency Requirements Solvency requirements for buy-back
scheme
"133MA. If the buy-back is made under a buy-back scheme, the next condition is
that, when the first offer was made under the buy-back scheme:
(a) there was in force a solvency declaration by the company's directors
that relates to the buy-back scheme and was made within 2 months
before the day on which that first offer was made; and
(b) unless the company is a proprietary company and the buy-back does not
exceed the 10% in 12 months limit - the company's auditor had sent to
the company an auditor's report on that declaration. Solvency
requirements for other buy-backs
"133MB. If the buy-back is not made under a buy-back scheme, the next
condition is that, as at the time of the buy-back:
(a) there is in force a solvency declaration by the company's directors
that relates to, and was made within 2 months before the day of, the
buy-back;
(b) unless the company is a proprietary company and the buy-back does not
exceed the 10% in 12 months limit - the company's auditor has sent to
the company an auditor's report on that declaration; and
(c) the company is not an externally-administered company. Copy of
solvency declaration and auditor's report to be lodged with Commission
"133MC. (1) Where a solvency declaration by a company's directors is made, the
company shall lodge a copy of the declaration with the Commission:
(a) if, within 6 days after the day on which the declaration is made, a
notice setting out a copy of the declaration is sent to a person
entitled to vote on a resolution to approve a proposed buy-back scheme
or buy-back to which the declaration relates - on or before the day
after the first day on which such a notice is so sent; or
(b) otherwise - within 7 days after the day on which the declaration is
made.
"(2) Within 7 days after a company's auditor sends to the company an auditor's
report on a solvency declaration by the company's directors, the company shall
lodge with the Commission a copy of the report. Revocation of solvency
declaration
"133MD. (1) Where:
(a) a solvency declaration by a company's directors is in force; and
(b) a director of the company (whether he or she signed the declaration or
not) becomes of the opinion that it is likely that the company will
not remain solvent as mentioned in the declaration; he or she shall,
as soon as practicable:
(c) sign a notice stating that he or she is of that opinion;
(d) give the notice to the company; and
(e) lodge a copy of the notice with the Commission.
"(2) A notice given to a company under subsection (1) in relation to a
solvency declaration by the company's directors revokes the declaration.
"(3) Where a solvency declaration by a company's directors that relates to a
buy-back scheme or buy-back is revoked under subsection (2) at a particular
time, the other solvency declarations (if any) by the company's directors that
relate to the buy-back scheme or buy-back are also revoked at that time.
"(4) In subsection (3):
'buy-back' includes a proposed buy-back;
'buy-back scheme' includes a proposed buy-back scheme. Solvency requirements
for completion of buy-back under buy-back scheme
"133ME. A company shall not provide any of the consideration that it is to
provide under an agreement constituting a buy-back made by it under a buy-back
scheme unless, when it first provides consideration that it is to provide
under an agreement constituting a buy-back made under the buy-back scheme:
(a) the offer period of the offers made under the scheme has ended;
(b) a solvency declaration by the company's directors that relates to the
buy-back scheme is in force; and
(c) unless the company is a proprietary company and the first-mentioned
buy-back does not exceed the 10% in 12 months limit - the company's
auditor has sent to the company an auditor's report on the
declaration. Company not to register certain transfers during solvency
period
"133MF. Where an offer made by a company under a buy-back scheme is accepted,
the company shall not, during the solvency period of the offer, register a
transfer to the company of shares, being a transfer pursuant to an agreement
resulting from the acceptance.
"Subdivision N - Share Buy-backs and other Securities Issues Buy-back
consideration not to consist of other securities of the company
"133NA. The next condition is that the consideration that has been or is to be
provided for the buy-back does not consist, or include an alternative
consideration that consists, wholly or partly of securities of the company. No
buy-backs during rights issue or placement
"133NB. The next condition is that:
(a) if the buy-back is made under a buy-back scheme - the first offer made
under the scheme was not made; or
(b) otherwise - the agreement constituting the buy-back is not entered
into; during, or within 3 months after the last day of:
(c) a period during which a rights offer or invitation by the company
remains open;
(d) without limiting the generality of paragraph (e), a period during
which there remains open:
(i) a share offer by the company that will, if accepted, result in
a placement of shares in the company; or
(ii) a share invitation by the company that is issued to a person
and will, if the person subscribes for or buys shares in the
company as a result of an application or offer made by the
person in response to the invitation, result in a placement of
such shares; or
(e) a period:
(i) beginning on a day when the company, or a person acting on its
behalf, starts to negotiate with a view to placing shares in
the company; and
(ii) ending on the day when the shares are placed or the
negotiations stop for some other reason. No rights issue or
placement during offer period or within 3 months after buy-back
"133NC. (1) A company shall not:
(a) during, or within 3 months after the last day of, the offer period of
a buy-back offer made by the company; or
(b) within 3 months after a day on which the company buys back shares;
make or issue a rights offer or invitation, place shares in the
company or cause such shares to be placed.
"(2) A contravention of subsection (1) does not affect the validity or
enforceability of an act, transaction, agreement, instrument, matter or thing.
"Subdivision P - Effect of Buy-back on Shares Rights attaching to bought back
shares
"133PA. Where a company buys back shares, all rights attached to the shares
are suspended:
(a) so long as the agreement constituting the buy-back is in effect; and
(b) if the agreement is discharged by performance - until the shares are
transferred to the company pursuant to the agreement. Company not to
dispose of bought back shares
"133PB. (1) A company shall not sell or otherwise dispose of, or agree to sell
or otherwise dispose of, shares that it has bought back or units of such
shares.
"(2) An agreement entered into in contravention of subsection (1) is void.
Cancellation of shares after transfer to company
"133PC. (1) Immediately after a transfer to a company of shares in the company
is registered by the company:
(a) the shares are cancelled; and
(b) all rights attached to the shares are extinguished; by force of this
subsection.
"(2) Where shares are cancelled by force of subsection (1), the company's
issued share capital is reduced by the nominal value of the shares, but the
company's nominal share capital is not affected. Accounting for money spent on
buy-back where amount exceeds nominal value of shares
"133PD. (1) This section applies where a company buys back shares.
"(2) The company shall apply:
(a) if it has a share premium account - the amounts (if any) standing to
the credit of that account; and
(b) its distributable profits (if any); in writing off the buy-back
premium (if any) and, if paragraph (a) applies, shall not so apply any
of those profits while an amount is standing to the credit of that
account.
"(3) Until the buy-back premium (if any) has been written off in full, the
company shall not pay, apply or otherwise deal with:
(a) if paragraph (2) (a) applies - an amount standing to the credit of
that account; or
(b) in any case - any of its distributable profits.
"(4) In this section:
'buy-back premium' means the amount (if any) by which the total of:
(a) the amounts (if any) that the company has paid for the buy-back; and
(b) the greater of the following:
(i) the total of the amounts that the company has spent on
acquiring the non-cash consideration (if any) provided by it
for the buy-back;
(ii) the money value of the non-cash consideration (if any) so
provided, as at the time when the last of it was so provided;
exceeds the nominal value of the shares.
"Subdivision Q - Effect of Insolvency Buy-back offer by
externally-administered company void
"133QA. Where an externally-administered company makes an offer under a
buy-back scheme, the offer is void. Effect of supervening insolvency on
buy-back scheme
"133QB. (1) This section applies where, at the end of the offer period of an
offer made under a buy-back scheme:
(a) no solvency declaration by the company's directors that relates to the
buy-back scheme is in force; or
(b) unless the company is a proprietary company and no buy-back made under
the buy-back scheme exceeds the 10% in 12 months limit - such a
declaration is in force but no auditor's report on the declaration has
been sent to the company by its auditor.
"(2) This section also applies where, after the end of the offer period, but
before the end of the solvency period, of an offer made under a buy-back
scheme, a solvency declaration by the company's directors that relates to the
buy-back scheme is revoked.
"(3) This section also applies where, during the solvency period of an offer
made under a buy-back scheme:
(a) a provisional liquidator of the company is appointed;
(b) a court makes an order for the winding up of the company;
(c) the company resolves that it be wound up; or
(d) the company is placed under official management.
"(4) If the offer has been accepted and a binding agreement has resulted from
the acceptance, the agreement is void.
"(5) Otherwise, the offer shall, despite section 133FC, be taken to have been
withdrawn.
"(6) If the offer has been accepted by a person, the company shall, as soon as
practicable, return to the person any documents that the person sent to the
company with the acceptance. Directors to indemnify insolvent company where
consideration provided, or partly-paid shares acquired, under buy-back
agreements
"133QC. (1) This section applies where:
(a) a company is placed under official management or commences to be wound
up;
(b) during or after the 12 months ending on:
(i) in any case - the day of the commencement of the official
management or winding up; or
(ii) if the company was insolvent throughout a period ending at that
commencement - the day when the company last ceased, before
that commencement, to be solvent; one or both of the following
happened:
(iii) the company provided consideration under an agreement;
(iv) partly-paid shares were transferred to the company pursuant to
an agreement; and
(c) the agreement was entered into before, during or after that 12 months
and:
(i) resulted from the acceptance of an offer made under a buy-back
scheme in relation to shares in the company; or
(ii) constituted a buy-back by the company otherwise than under a
buy-back scheme.
"(2) If subparagraph (1) (b) (iii) applies, then, to the extent (if any) that
the consideration consisted of an amount of money, the indemnifying directors
are jointly and severally liable to pay to the company an amount equal to that
amount.
"(3) If subparagraph (1) (b) (iii) applies, then, to the extent (if any) that
the consideration consisted of non-cash consideration, the indemnifying
directors are jointly and severally liable to pay to the company an amount
equal to:
(a) if the company acquired the non-cash consideration in order to provide
it under the agreement - the total of the amounts spent by the company
on acquiring it; or
(b) otherwise - the money value of the non-cash consideration when the
last of it was so provided.
"(4) If subparagraph (1) (b) (iv) applies, the indemnifying directors are
jointly and severally liable to pay to the company an amount equal to the
total of the amounts (including amounts of premium) that remained unpaid on
the partly-paid shares.
"(5) For the purposes of this section, an indemnifying director is a person
who:
(a) if subparagraph (1) (c) (i) applies - signed, as a director of the
company, a solvency declaration by the company's directors that
related to the buy-back scheme and was in force at the end of the
solvency period of the offer; or
(b) if subparagraph (1) (c) (ii) applies:
(i) signed, as a director of the company, a solvency declaration by
the company's directors that related to the buy-back and was in
force at the time when the agreement was entered into; or
(ii) if no such declaration was so in force - was a director of the
company at that time and was in any way, by act or omission,
directly or indirectly, knowingly concerned in or party to the
entering into of the agreement by the company; even if the
person is no longer such a director.
"(6) A person who is an indemnifying director because of paragraph (5) (a) or
subparagraph (5) (b) (i) is not liable under subsection (2) or (3) in relation
to the consideration, or under subsection (4) in relation to the amounts
referred to in that subsection, if it is established that:
(a) at the time when he or she signed the declaration, the person had:
(i) the opinions described in it; and
(ii) reasonable grounds for those opinions; and
(b) at all times when he or she was a director of the company after that
time and before the end of the period referred to in paragraph (5) (a)
or the time referred to in subparagraph (5) (b) (i), as the case may
be, the person:
(i) was of the opinion that the company would remain solvent as
mentioned in the declaration; and
(ii) had reasonable grounds for that opinion. Relief from liability
under section 133QC
"133QD. (1) Where, in a proceeding against a person in respect of an alleged
liability of the person under section 133QC to pay an amount, it appears to
the court that the person is or may be liable under that section to pay the
amount but that he or she:
(a) has acted honestly at all relevant times; and
(b) having regard to all the circumstances of the case, ought fairly to be
excused in relation to the liability; the court may relieve him or her
from the liability on such terms (if any) as the court thinks fit.
"(2) A person who believes on reasonable grounds that a proceeding will be
begun against the person in relation to an alleged liability of the person
under section 133QC may apply to the Court for relief.
"(3) On an application under subsection (2), the Court has the same power to
relieve the person under subsection (1) as it would have if a proceeding
against the person in respect of the alleged liability were pending in the
Court.
"Subdivision R - Rights of Unpaid Sellers Specific performance of buy-back
agreements
"133RA. Subject to section 133RB, an agreement constituting a buy-back may be
enforced by an order for specific performance made by a court of competent
jurisdiction. Buy-back agreement unenforceable while company insolvent
"133RB. (1) Subject to section 133RC, an agreement constituting a buy-back by
a company is unenforceable while:
(a) the company is being wound up;
(b) there is a provisional liquidator of the company;
(c) the company is under official management;
(d) a receiver, or a receiver and manager, of property of the company,
whether or not appointed by a court, is acting;
(e) a compromise or arrangement between the company and its creditors or
any class of them is being administered; or
(f) subsection (2) applies to the company.
"(2) This subsection applies to a company on a particular day unless the
company is solvent on that day and may reasonably be expected to remain
solvent, throughout the period of 12 months starting on that day, even if:
(a) each buy-back offer (if any) that relates to shares in the company and
remains open as at that day is accepted, and the resulting agreement
is completed, during that period; and
(b) each agreement (if any) that constitutes a buy-back by the company and
remains uncompleted as at that day is completed during that period.
"(3) The onus of establishing that an agreement is unenforceable because of
this section lies on the company. Unpaid seller may prove in winding up of
company
"133RC. (1) This section applies where, immediately before the relevant date
in relation to a winding up of a company, obligations of the company under an
agreement constituting a buy-back by the company have not been fully
performed.
"(2) Subject to this Division, another party to the agreement may claim in the
winding up in respect of the company's obligations under the agreement to that
other party, in so far as they remain unperformed.
"(3) Subsection (2) does not limit the generality, or affect the operation, of
section 438 or 439.
"(4) Section 454 does not apply in relation to the agreement.
"(5) A person is not entitled to a distribution of money or property in the
winding up in connection with a claim in respect of obligations of the company
under the agreement unless the seller's obligations under the agreement, so
far as they relate to the supply of documents in connection with the buy-back,
have been discharged.
"(6) Subsection (5) does not affect a person's entitlement to claim in the
winding up. Ranking of seller's claim in winding up
"133RD. (1) This section applies where a company is wound up.
"(2) A seller's claim against the company shall be postponed until all other
claims in the winding up have been satisfied, other than:
(a) any other seller's claim against the company;
(b) a sum due to a member of the company in that capacity, whether by way
of dividends, profits or otherwise; or
(c) a claim in connection with the adjustment of the rights of the
contributories among themselves.
"(3) A seller's claim against the company shall be taken not to be, and shall
be paid in priority to, a sum of the kind referred to in paragraph (2) (b).
"(4) A person is not entitled to a distribution of money or property in
connection with the adjustment of the rights of the contributories among
themselves unless and until all seller's claims against the company have been
satisfied.
"(5) All seller's claims against the company rank equally between themselves
and, subject to subsection (2), shall be paid:
(a) if the company's property is sufficient to pay them all - in full; or
(b) otherwise - proportionately.
"Subdivision S - Certificates and Declarations of Compliance Certificate of
compliance
"133SA. (1) This section applies where an offer made by a company under a
buy-back scheme is accompanied by a copy of a certificate stating that this
Division has been complied with in relation to each buy-back to be made under
the buy-back scheme.
"(2) This section also applies where a certificate stating that this Division
has been complied with in relation to a specified buy-back that a company
proposes to make otherwise than under a buy-back scheme is given to a person.
"(3) A person to whom an offer is made under the buy-back scheme, or the
person to whom the certificate is given, as the case may be, is not liable to
have an order made against the person under subsection 130 (4) because of an
agreement made or performed, or a transaction engaged in, by the person in
reliance on the certificate.
"(4) No such agreement or transaction is invalid, or voidable under subsection
130 (2), because it:
(a) is made or performed, or engaged in, as the case may be; or
(b) is, for the purposes of section 130, related to an agreement made or
performed, or to a transaction engaged in; in contravention of section
129.
"(5) Subsections (3) and (4) do not apply if, on application by the company or
a person who has suffered, or is likely to suffer, loss or damage as a result
of the making or performance of an agreement, or the engaging in of a
transaction, as mentioned in subsection (3), the Court declares by order that
it is satisfied that the person referred to in subsection (1) or (2) became
aware, before making the agreement or engaging in the transaction, that a
condition prescribed by this Division had not been satisfied in relation to:
(a) the buy-back that would result from the acceptance of the offer
referred to in subsection (3); or
(b) the proposed buy-back specified in the certificate; as the case may
be. Presumptions about certain matters
"133SB. (1) In a proceeding, a document purporting to be a compliance
certificate shall, unless the contrary is established, be presumed to be a
certificate duly given for the purposes of section 133SA.
"(2) In a proceeding, a document purporting to be a copy of a compliance
certificate shall, unless the contrary is established, be presumed to be a
true copy of a certificate duly given for the purposes of section 133SA.
"(3) Where a person to whom an offer was made under a buy-back scheme has
possession of a copy of a compliance certificate relating to the buy-back
scheme, it shall be presumed, unless the contrary is established, that the
copy accompanied the offer.
"(4) A person who has possession of a compliance certificate shall, unless the
contrary is established, be presumed to be the person to whom the certificate
was given.
"(5) For the purposes of subsection 133SA (5), a person shall, unless the
contrary is established, be presumed to have been aware at a particular time
of any matter of which an employee or agent of the person having duties, or
acting on the person's behalf, in relation to the proposed buy-back concerned
was aware at that time. Who must sign compliance certificate
"133SC. A compliance certificate shall be signed by at least 2 directors, or
by a director and a secretary, of the company. Offences relating to compliance
certificates: buy-back schemes
"133SD. (1) Where some but not all of the offers made by a company under a
buy-back scheme are accompanied by a compliance certificate relating to the
buy-back scheme, the company contravenes this subsection.
"(2) Where an offer made by a company to a person under a buy-back scheme was
accompanied by a copy of a compliance certificate relating to the buy-back
scheme and a buy-back made under the buy-back scheme contravenes section 129,
the company shall be taken to have contravened this subsection by sending the
copy to the person.
"(3) A company that contravenes subsection (1) or (2) is not guilty of an
offence by virtue of this section or section 570, but each officer of the
company who is in default contravenes that subsection.
"(4) It is a defence to a prosecution for a contravention of subsection (2) if
it is established that when the copy of the certificate was sent to the person
the defendant believed on reasonable grounds that no buy-back made under the
buy-back scheme would contravene section 129.
Penalty: $2,500 or imprisonment for 6 months, or both. Offences relating to
compliance certificates: other buy-backs
"133SE. (1) Where:
(a) a person signs, or gives to another person, a compliance certificate
relating to a buy-back that a company proposes to make, at a
particular time or within a particular period, otherwise than under a
buy-back scheme; and
(b) the buy-back is made before, at, or within a reasonable period after,
that time or the end of the first-mentioned period and contravenes
section 129; the person shall be taken to have contravened this
subsection by signing the certificate, or giving it to the other
person, as the case may be.
"(2) It is a defence to a prosecution for a contravention of subsection (1) if
it is established that the defendant, when signing the certificate or giving
it to the other person, as the case requires, believed on reasonable grounds
that the proposed buy-back would not, if made as mentioned in paragraph (1)
(b), contravene section 129.
Penalty: $2,500 or imprisonment for 6 months, or both. Declaration by Court of
substantial compliance
"133SF. Where, on application to the Court by a party to an agreement or
proposed agreement constituting a buy-back, the Court is satisfied that a
particular condition prescribed by this Division has been substantially
satisfied in relation to the buy-back or proposed buy-back, the Court may by
order declare that that condition has been satisfied in relation to the
buy-back or proposed buy-back.
"Subdivision T - Notifying Commission and Securities Exchanges
about Buy-backs Company to notify Commission of buy-backs
"133TA. (1) Within the notification period in relation to the last day of the
offer period of an offer made by it under a buy-back scheme, a company shall
lodge with the Commission a written notice that specifies the buy-back scheme
and sets out:
(a) the total number of shares in relation to which offers made under the
buy-back scheme have been accepted; and
(b) particulars of the total consideration that, under the agreements
resulting from the acceptance of such offers, has been or is to be
provided for the purchase of those shares.
"(2) Within the notification period in relation to a day on which a buy-back
is made otherwise than under a buy-back scheme, the company shall lodge with
the Commission a written notice that specifies the buy-back and sets out:
(a) the number of shares bought back; and
(b) particulars of the consideration that has been or is to be provided
for the buy-back.
"(3) Within the notification period in relation to a day on which an agreement
constituting a buy-back is rescinded, or is discharged otherwise than by
performance, the company shall lodge with the Commission a written notice that
specifies the agreement and sets out:
(a) when the agreement was rescinded or discharged; and
(b) the number of shares to which the agreement related.
"(4) For the purposes of this section, a company lodges a notice within the
notification period in relation to a particular day if, and only if, it lodges
the notice:
(a) in the case of a listed body - before 9.30 a.m. on the first day that
is later than that day and is a trading day of a notifiable exchange
or a business day; or
(b) otherwise - within 7 days after that day. Listed company to notify
securities exchanges of buy-backs
"133TB. A listed body that section 133TA requires to lodge a notice with the
Commission shall give to each notifiable exchange, before 9.30 a.m. on the
next trading day of that notifiable exchange after the day referred to in
subsection 133TA (1), (2) or (3), as the case requires, a copy of the notice.
"Subdivision 1 - Listed Company to Notify Members about Share
Cancellations Notifying member whose shares were cancelled
"133UA. A company that is a listed body shall, within 2 business days after
shares included in a class of voting shares in the company and held by a
person are cancelled by force of subsection 133PC (1), send to the person a
written notice that:
(a) states that the shares have been cancelled;
(b) specifies the day of the cancellation; and
(c) specifies the number of issued shares in that class as at the time
immediately after the cancellation. Notifying members generally
"133UB. (1) Subsection (3) applies where, as at the end of a day on which
shares in a class of voting shares in a company that is a listed body are
transferred to the company pursuant to an agreement constituting a buy-back
made under a buy-back scheme, each agreement constituting a buy-back made
under the buy-back scheme has been discharged, whether by performance or
otherwise, or rescinded.
"(2) Subsection (3) also applies where, as at the end of a day on which shares
in a class of voting shares in a company that is a listed body were
transferred to the company, the number calculated in accordance with the
following formula exceeds 5:
(A - B) X 100
-------------;
A where:
A is the number of issued shares in that class as at:
(a) if the company has previously become required to give under this
section notices relating to shares in that class - the time when the
company last became so required; or
(b) otherwise - the start of the first day on which shares in that class
were transferred to the company after the commencement of this Part;
B is the number of issued shares in that class as at the end of the
first-mentioned day.
"(3) Within 2 business days after the day first referred to in subsection (1)
or (2), as the case may be, the company shall send to each of its members a
written notice specifying:
(a) the day on which the notice is sent; and
(b) the number of issued shares in that class as at the beginning of the
last-mentioned day.
"(4) For the purposes of subsection (2), a company that this section requires
to send notices because of a transfer of shares shall be taken to have become,
at the end of the day of the transfer, required to give the notices.
"Subdivision V - Register of Buy-backs
Company to keep register
"133VA. A company:
(a) whose articles contain a buy-back authorisation; or
(b) that has at any time bought back shares; shall establish a register
for the purposes of this Division and keep it in accordance with this
Subdivision. Particulars of buy-back schemes
"133VB. (1) As soon as practicable after making offers under a buy-back
scheme, the company shall include in the register a copy of one of the offers.
"(2) As soon as practicable after an offer made by the company under a
buy-back scheme is accepted, the company shall make in the register an entry
that refers to the buy-back scheme and sets out:
(a) the name of the offeree; and
(b) the date of the acceptance. Particulars of other buy-backs
"133VC. As soon as practicable after a buy-back is made by the company
otherwise than under a buy-back scheme, the company shall:
(a) include in the register a copy of the agreement constituting the
buy-back; and
(b) make in the register an entry that refers to the buy-back and sets
out:
(i) the name of each party to the agreement (other than the
company);
(ii) the date on which the agreement was made;
(iii) the number of shares bought back; and
(iv) particulars of the consideration that has been or is to be
provided for the buy-back. Alteration of register where
buy-back does not proceed
"133VD. (1) As soon as practicable after an agreement resulting from the
acceptance of an offer made by the company under a buy-back scheme becomes
void, or such an offer is withdrawn, by virtue of section 133QB, the company
shall remove from the register:
(a) the copy of an offer made under the buy-back scheme included under
subsection 133VB (1); and
(b) each entry made under subsection 133VB (2) because of the acceptance
of an offer made under the buy-back scheme.
"(2) As soon as practicable after an agreement constituting a buy-back by the
company is rescinded, or is discharged otherwise than by performance, the
company shall remove from the register the entry made under subsection 133VB
(2) because of the acceptance that resulted in the agreement, or made under
section 133VC because of the agreement, as the case requires, and the copy (if
any) of the agreement included under section 133VC.
"(3) A reference in this section to removing an entry or copy from the
register is a reference to:
(a) including the copy or entry in a part of the register separate from
the part in which copies are included, and entries are made, under
sections 133VB and 133VC; and
(b) removing the copy or entry from the last-mentioned part. Entries in
register after cancellation of shares
"133VE. (1) As soon as practicable after shares in the company are transferred
to the company pursuant to an agreement, the company shall include in the
register, in relation to the entry:
(a) made under subsection 133VB (2) because of the acceptance that
resulted in the agreement; or
(b) made under section 133VC because of the agreement; as the case
requires, a notation indicating that the shares have been cancelled
and specifying the day of the cancellation.
"(2) As soon as practicable after a day on which shares in a class of shares
in the company are cancelled by force of subsection 133PC (1), the company
shall include in the register an entry specifying:
(a) the number of shares in that class that were cancelled on that day;
and
(b) the number of issued shares in that class as at the end of that day.
Inspection and copies of register
"133VF. (1) The register shall be kept at the company's registered office and
shall be open for inspection:
(a) by any member or creditor of the company - without charge; and
(b) by any other person - on payment for each inspection of such amount,
not exceeding the prescribed amount, as the company requires, or,
where the company does not require payment, without charge.
"(2) A person may request the company to give the person a copy of the
register or any part of it and, where such a request is made, the company
shall comply with the request:
(a) if the company requires payment of an amount not exceeding the
prescribed amount - within 21 days after payment of the amount is
received by the company or within such longer period as the Commission
approves; or
(b) otherwise - within 21 days after the request is made or within such
longer period as the Commission approves.".
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