CODEWORD

The Takeovers Panel is a body corporate established by the Takeovers Act 1993.

Under the Act, the Panel must have not less than five and not more than eight members appointed by the Minister of Commerce. The Minister appoints one member as the Chairperson of the Panel and another member as the Deputy Chairperson.

At least one member must be a barrister or solicitor of the High Court of not less than seven years’ practice. All other members must be qualified or experienced in business, accounting or law. 

Functions of the Panel

The Takeovers Act 1993 determines the functions of the Panel. In summary, these functions are:

• to recommend a Takeovers Code and subsequent amendments;
• to enforce the Code;
• to grant exemptions from the Code; and
• to promote public understanding of the law and practice relating to takeovers. 

To recommend a Takeovers Code

The Panel was required to recommend a Takeovers Code with the following objectives:

• to encourage efficient allocation of resources;
• to encourage competition for the control of companies subject to the Code;
• to assist in ensuring that shareholders are treated fairly in a takeover;
• to promote international competitiveness of New Zealand’s capital markets;
• to recognise that shareholders must ultimately decide for themselves the merits of a takeover offer; and
• to maintain a proper relation between the costs of compliance with the Code and the benefits resulting from it.

The Takeovers Code, recommended by the Panel, was adopted by the Government on 16 October 2000 and notified in the Gazette on 19 October 2000. It comes into force on 1 July 2001. 

To enforce the Takeovers Code

Part III of the Takeovers Act sets out the Panel’s powers to enforce the Code. Where the Panel suspects a breach or intended breach of the Code it can:

• call a meeting to determine whether to exercise its powers; and
• make an interim restraining order which may remain in force until two days after the date of the meeting. 

After a meeting, if the Panel is not satisfied that the Code has been, or is intended to be, complied with it can:

• extend the interim restraining order for a further 21 days;
• issue a restraining order for up to 21 days if an interim restraining order was not made; and
• apply to the Court for a wide range of orders including orders for: 
  • disposal or forfeiture of shares;
  • removal of voting rights;
  • avoidance of agreements; and
  • payment of compensation. 

The Court may have regard to any determination or recommendation made by the Panel, including any recommendation made at the request of the Court. 

To grant exemptions from the Takeovers Code

The Takeovers Act is in the process of being amended to ensure that the Panel may grant both individual and class exemptions from compliance with any provision of the Takeovers Code.

Exemptions may be granted to any person or any class of persons or class of transaction or class of offer, and may be subject to terms and conditions.

We will consult with the public on a set of class exemptions from the Code. The exemptions will be in place when the Code comes into force in July 2001. 

To promote public understanding of the law and practice relating to takeovers

The Panel has set up a web site (www.takeovers.govt.nz) which carries information about the Takeovers Act, the Code, and about the Panel and its work.

CodeWord will publish information of interest to shareholders, lawyers, companies and others. 

Members of the Panel

The present members of the Takeovers Panel are:

Chairperson

John King, Lawyer

Deputy Chairperson

David Jones, Lawyer

Members

Gordon Gilmour, Company Director

Alistair Lawrence, Investment Banker

Kevin O’Connor, Company Director

Malcolm Ott, Chartered Accountant

Paul Randall, Investment Consultant

Daphne Rawstorne, Company Director and Business Consultant