Mixed Ownership Model Bill – 51% ownership amendments

In a Supplementary Order Paper No 42 – proposed amendments change 51% voting rights to 51% ownership.

Hon Tony Ryall, in Committee, to move the following amendments:

Explanatory note

The Bill currently contains 2 ownership limits for mixed ownership model companies: a 51% Crown control requirement and a 10% ownership cap for non-Crown persons. These ownership limits currently apply to voting rights attaching to shares and other securities of the company. This Supplementary Order Paper extends these 2 ownership limits so that they apply to shares of the company (including non-voting shares), as well as to the voting rights. The effect of doing so is that—

  • the Crown must hold 51% of every class of shares in the company, as well as 51% of every class of the voting securities (which are voting shares and other securities with voting rights); and
  • no person (other than the Crown) will be able to have relevant interests in more than 10% of any class of shares in the company or more than 10% of any class of the voting securities of the company; and
  • if a person has relevant interests in shares or voting securities that exceed the 10% limit, as well as the person not being entitled to exercise voting rights attaching to the shares or voting securities in excess of the 10% limit, no dividend or other distribution may be paid in relation to them. So as to enable the company to act with certainty (eg, to deal with complicated shareholding situations), the company may determine which are the excess securities, in accordance with the constitution, in implementing the consequences of exceeding the 10% limit.

In addition, it is clarified that the current prohibition on sales of shares by Ministers that would result in the Crown ceasing to have 51% control applies also to other types of voting securities that the Ministers may acquire.

I’m more than just pleased about this. 51% total ownership was something I and United Future campaigned on, and it was agreed to in the United Future/National Confidence and Supply agreement, so this holds fast to that stand.

It also shows that United Future can act as a moderator on National.

Regulatory Impact Statement

Providing for greater controls over Mixed Ownership Model companies, by including non-voting shares in the 51% floor and the 10% cap Agency Disclosure Statement

This Regulatory Impact Statement has been prepared by The Treasury.

This RIS provides an analysis of options to ensure that the Mixed Ownership Model Bill (MOM Bill) includes economic interests in the 51% floor and 10% cap, to ensure consistency with the Confidence and Supply Agreement dated 5 December 2011 between the New Zealand National Party and United Future New Zealand (UFNZ) (the Confidence and Supply Agreement), specifically around introducing “statutory limits on the sale of public assets to no more than 49% of shareholding to private interests including limits on the extent of single entity ownership.”

This RIS has been informed by discussions between the Office of the Minister for State Owned Enterprises and the Office of the Leader of UFNZ. Those discussions have prescribed the nature of the regulatory response, particularly in the context of the MOM Bill.

Full Regulatory Impact Statement PDF