Senator MURRAY (11:55 AM) —by leave—I move Democrat amendments Nos 3 and 13 on sheet 1592 revised:

(3) Schedule 1, item 5, page 229 (after line 21), at the end of Part 6A.2, add:

Division 3—Notice that person has become 85% holder of a class of securities

665D Notice by 85% holder to company

85% holder—holder of 85% of securities in particular class

(1) A person is an 85% holder in relation to a class of securities of a company if the person holds, either alone or with a related body corporate, full beneficial interests in at least 85% of the securities (by number) in that class.

85% holder—holder with 85% voting power and 85% of whole company

(2) A person is also an 85% holder in relation to a class of securities of a company if:

(a) the securities in the class are shares or convertible into shares; and

(b) the person's voting power in the company is at least 85%; and

(c) the person holds, either alone or with a related body corporate, full benefi cial interests in at least 85% by value of all the securities of the company that are either shares or convertible into shares.

Person becoming 85% holder to give notice to company

(3) A person who becomes an 85% holder in relation to a class of securities of a company must notify the company in writing that they have become an 85% holder in relation to that class. The person must give the notice within 14 days after the person becomes aware of the information.

Person continuing to be 85% holder to give notice to company

(4) A person who:

(a) gives a company a notice under subsection (3) in relation to a class of securities; and

(b) is an 85% holder in relation to the class on any anniversary of becoming an 85% holder in relation to the class;

must notify the company in writing that they continue to be an 85% holder in relation to the class. The person must give the notice within 14 days after the anniversary.

665E Notice by company to other members

Company to notify members

(1) A company that is given a notice by a person under section 665D in relation to a class of securities must notify its members in writing that:

(a) the person:

(i) has become an 85% holder in relation to the class; or

(ii) continues to be an 85% holder in relation to the class; and

(b) the person will be able to acquire the securities in that class under this Part if the person becomes a 90% holder in relation to that class.

Time for notifying members

(2) The company must notify its members before, or at the same time as, whichever of the following it first gives to its members after the company is given the notice under section 665D:

(a) a notice under another provision of this Law

(b) a report under a provision of this Law.

Information about 85% holder to be prominent if included in other material given to members

(3) If a company notifies its members under this section by including the information referred to in paragraph (1)(a) and (b) in:

(a) a notice given to members under another provision of this Law; or

(b) a report given to members under a provision of this Law;

the information must appear prominently in the notice or report.

(13) Schedule 3, item 371, page 423, after the item relating to subsection 665A(2), insert:

Subsection 665D(3) or (4)

Penalty: 25 penalty units or imprisonment for 6 months, or both.

Section 665E

Penalty: 25 penalty units or imprisonment for 6 months, or both.

These amendments relate to the new provision in section 664A that will allow a person who owns 90 per cent or more of the shares in a company to compulsorily acquire the remaining shares in the company. The acquisition must occur at a fair price and the minority shareholders have the right to object and have the matter determined by a court if they believe that the price does not represent a fair price. For many people, this issue is probably the most contentious issue in the bill, and I am sure Senator Conroy will speak on it at length later on when he comes to his amendment.

I made a number of comments in relation to the compulsory acquisition power in previous remarks. I am not going to repeat those except to say that we do accept the need for a power of compulsory acquisition, and of course that is where the debate will be later on, I suspect. This amendment, however, is part of our effort to increase the safeguards attaching to the compulsory acquisition process. We all know that compulsory acquisition needs to be dealt with with great care. The effect of these amendments is to require a shareholder who acquires more than 85 per cent of a company to give notice to the company that they have reached that shareholding. When a company receives notice from a shareholder that that is the case, the company is obliged to give notice to the remaining shareholders that there is an 85 per cent holding and that if that holder increases their holding to 90 per cent the minority may be subject to compulsory acquisition. In other words, it is an early warning device designed to make the market as informed as possible so that people can take action and not have the compulsory acquisition ability descend on them by surprise and not have them unable to plan in advance of that event.

Our desire in moving this amendment is to forewarn minority shareholders that their shares may be the subject of compulsory acquisition in the future. The situation we are trying to avoid is a person holding shares for a number of years while a substantial shareholder creeps over the 90 per cent line and that minority holder receiving a letter in the mail out of the blue which states that their shares are going to be acquired compulsorily. This provision will result in those shareholders being given notice in advance that their shares may be compulsorily acquired in the future. As with our other amendments, we have advised both the government and the opposition of our intention and of these amendments. I commend them to the committee.