Welcome to Issue No. 10 of Corporate Reporter, Bell Gully's regular round-up of corporate and general commercial matters, designed to keep you informed on regulatory developments, legislation and cases of interest.
Items in this issue include:
The commencement of the remaining key provisions of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AML/CFT Act) has been confirmed as 30 June 2013 by the Anti-Money Laundering and Countering Financing of Terrorism Act Commencement Order 2011. The two-year notice period has been given to allow time for reporting entities to make the necessary systems and organisational investments to comply with the AML/CFT Act and accompanying regulations.
The commencement order also brings into force provisions that enable Ministers and AML/CFT supervisors to make codes of practice. The first code of practice relates to identity verification and is in the final stages of development.
In addition to the commencement order, four new regulations have been made under the AML/CFT Act. These regulations follow on from Cabinet policy decisions made in November 2010 and June 2011. Details of the November 2010 Cabinet decisions were discussed in Issue No. 6 of Corporate Reporter. Some minor changes to Cabinet's November decisions were made in June, including:
All of the AML/CFT Cabinet papers provided to Ministers are available on the Ministry of Justice website here.
The new regulations are:
These regulations commence on 28 July 2011;
the Anti-Money Laundering and Countering Financing of Terrorism (Exemptions) Regulations 2011 which exempt some transactions and services from the AML/CFT Act or parts of the Act. Details of how these regulated exemptions are to work are available on the Ministry of Justice website here. These regulations commence on 30 June 2013;
the Anti-Money Laundering and Countering Financing of Terrorism (Ministerial Exemption Form) Regulations 2011 which prescribe the form in which the Minister of Justice must make Ministerial exemptions. These regulations come into force on 28 July 2011; and
the Anti-Money Laundering and Countering Financing of Terrorism (Requirements and Compliance) Regulations 2011 which supplement certain provisions of Part 2 of the AML/CFT Act (relating to requirements and compliance). In particular, these regulations:
The regulations come into force on 30 June 2013.
The new AML/CFT regime is intended to assist New Zealand in the global fight against organised crime and will enhance New Zealand's ability to detect and trace illegal money through the financial system. The regime also brings New Zealand more closely in line with Australia by improving compliance with the recommendations of the Financial Action Task Force – the inter-governmental body responsible for international standards that combat money laundering and terrorist financing.
The Act applies to financial institutions, casinos, certain trust and company service providers and certain financial advisers (reporting entities).
Further information about obligations of reporting entities and how the regime will be supervised is available on the Ministry of Justice website (here) and the AML/CFT supervisor's websites:
Legislation for incorporated societies is under review
The Law Commission has called for submissions on an issues paper setting out why it thinks the century-old Incorporated Societies Act 1908 should be updated and revised.
The Incorporated Societies Act allows not-for-profit organisations to incorporate as bodies corporate separate from their own members. This has been the preferred model for many of New Zealand's cultural, sporting and recreational organisations as well as organisations covering a full range of community activities and business and professional associations.
The issues paper starts from the premise that New Zealand ought to retain a separate statutory regime that allows such groups to incorporate. However, the Commission is seeking feedback on a range of issues and options for reform of the existing incorporated society model including:
The Commission also suggests that any reform of the Incorporated Societies Act should include the ability of charitable trusts to incorporate under the Charitable Trusts Act 1957.
The Law Commission's issues paper "Reforming the Incorporated Societies Act 1908" is available here.
Submissions on the issues paper close on 30 September 2011.
New issues paper on review of the law of trusts
The Law Commission is undertaking a three-stage review to modernise the law of trusts:
To date, the Commission has released four issues papers on stage one of the review, and the fourth issues paper "The Duties, Office and Powers of a Trustee" is now open for submissions.
Part one of this paper examines the duties that a trustee owes to beneficiaries of a trust. Part two of the paper discusses the appointment, retirement and removal of trustees. It also addresses the powers given to a trustee.
Submissions on this paper close on 31 August 2011. Further details on the review are available online at www.lawcom.govt.nz/project/review-law-trusts.
|In the courts||Top|
A recent Australian court decision about the duties of directors of listed companies when considering the company's financial statements raises some important issues for New Zealand boards.
In Australian Securities and Investment Commission v Healy  FCS 717, ASIC brought proceedings against the directors of certain companies in the Centro Properties Group alleging that the directors failed to take all reasonable steps to ensure compliance with the financial reporting obligations of the Corporations Act 2001, and breaches of their statutory duty of care and diligence.
The allegations related to disclosures in the 2007 annual financial statements of Centro Properties Group and Central Retail Group. Those financial statements wrongly classified liabilities of about A$2.1 billion as non-current liabilities instead of current liabilities and failed to disclose certain post balance date related party guarantees.
The main focus of the directors' defence to ASIC's allegations was that they had taken all reasonable steps to comply, or secure compliance, with their obligations by engaging auditors to audit the financial statements and by following all the processes that could have been undertaken, including by obtaining all proper advice, to ensure that the financial statements complied with the Act. The directors argued that that they were entitled to rely on the assurance of Centro's auditors and Centro's highly experienced management team that the required disclosures had been made in the relevant financial statements.
The court's decision
The court held that each director is expected to take a diligent and intelligent interest in the information available to him or her, to understand that information, and apply an enquiring mind to the responsibilities placed upon him or her. The court found that, notwithstanding the fact that Centro had engaged auditors to audit the relevant financial statements, and that neither Centro management nor the auditors had detected, nor brought to the board's attention, the error as to the classification of the liabilities, the error was such that it could have been identified by the directors without difficulty if they had carried out a careful and diligent review of the financial statements.
The notes to the financial statements included a concise and correct statement as to the classification of current liabilities. The court held that if the directors had read the financial statements – as they should have done – they would then have understood the classification requirement and this, taken together with their factual knowledge of the facility terms, meant that they should have understood that there was an error in the classification of the liabilities as non-current liabilities.
Comparison with the Feltex decision
Interestingly, as part of the Centro directors' defence, the directors sought to convince the court to adopt the approach taken by Judge Doogue in the recent New Zealand District Court decision Ministry of Economic Development v Feeney & Ors (the Feltex decision).
In the Feltex decision the directors successfully defended criminal charges under section 36A of the Financial Reporting Act 1993 for errors that appeared in Feltex's 2005 interim accounts. The directors relied on the defence provided in section 40 of the Act that they took "all reasonable and proper steps" to ensure compliance with the Act. Judge Doogue dismissed the prosecution's argument that the directors themselves should have reviewed the lengthy and complex IFRS standards and then applied those to Feltex's interim financial statements. This proposition was found to be "utterly unrealistic", as "company directors will not have anywhere near the same level of knowledge and expertise in accounting standards that a specialist auditor will have and the best course for a director is to seek and follow the advice of an expert".
The judge in the Centro decision acknowledged that the views expressed by Judge Doogue were "instructive", but stated that each case must be decided on its own particular facts. In particular, the court noted that there was no question of ASIC contending that the Centro directors "should have done it all themselves and become familiar with the complexities of various accounting standards", noting that the directors "cannot and are not required to take on that task". In contrast to the facts in the Feltex decision, the court concluded that the Centro directors did not need a sophisticated knowledge or understanding of accounting standards to have identified the errors in the Centro group's financial statements. The critical factual difference between the two cases was that the Centro financial statements identified the relevant test for classification of "current" liabilities and the court held that this should have led the directors to identify the error.
Some commentators have suggested that the different results in the two cases arise because Feltex is a criminal case, whereas Centro was a civil case, and therefore different standards of proof applied. This is incorrect. The defence of "all reasonable and proper steps" was an affirmative defence that the Feltex directors needed to prove on the balance of probabilities. The criminal / civil distinction is therefore entirely irrelevant to the different results. Rather, the difference arises from the different facts of the two cases.
Lessons for New Zealand directors
Although both the Centro decision and the Feltex decision turn on their own particular facts, both cases highlight the high standard of care required of directors when considering financial statements.
Under both Australian and New Zealand legislation, directors are subject to special responsibilities for approving financial statements. The Centro decision suggests that such responsibilities necessarily require that directors of public companies have a degree of financial literacy, which should at least extend as far as an understanding of basic accounting concepts and conventional accounting practices to enable them to carry out their responsibilities adequately.
It is clear that directors must carefully review the financial statements (including notes) and accompanying papers provided to them, and have regard to the information they know about the company when undertaking that review. Directors will be expected to ask questions of management and advisers with respect to issues that arise from their review of the documents before approving the financial statements.
Both cases also identify limits on the extent to which directors can rely on management and external advisers with regards to approving and adopting financial statements. The courts in both the Feltex decision and the Centro decision acknowledge that reasonable reliance on others by directors is legitimate. However, the Centro decision indicates that a court is likely to find that such reliance is not reasonable when a director has sufficient knowledge to identify a potential error in the financial statements and fails to question management and the external advisers on the matter. Further, directors may not substitute reliance upon the advice of others for their own attention and examination of the financial statements. The court found that the Centro directors failed to see the errors in the financial statements that "could have been seen as apparent without difficulty", because they relied exclusively on the internal processes which the Centro group had in place and on their advisers.
In the Centro decision, the court held that the complexity and volume of information presented to the board cannot be an excuse for directors failing to properly read and understand important documents such as financial statements. The court's view is that the board is able to control the information it receives and should prevent information overload. In light of those comments, it would be prudent for all boards to review their practices to ensure that they are not overburdened with information.
Updated 'corporate social responsibility' guidelines for NZ companies
The OCED Guidelines for Multinational Enterprises have been updated to reflect changes in the social expectations on business over the last decade. All OECD member countries and 12 additional countries have endorsed the updated 2011 Guidelines.
The Guidelines are a comprehensive code of conduct that provide recommendations for socially-responsible business conduct by multinational enterprises wherever they operate. This includes New Zealand companies whose immediate operations are domestic, but who participate in an international supply chain, as well as those with international operations.
The Guidelines provide voluntary principles and standards for responsible business conduct in areas such as employment and industrial relations, human rights, environment, information disclosure, combating bribery, consumer interests, science and technology, competition, and taxation.
Although the Guidelines are voluntary, they do provide a format for raising issues about a company's activities and business behaviour. Issues can be brought to the attention of the national contact point (NCP) of the country where a problem has occurred. In New Zealand, the Ministry of Economic Development is the NCP for the Guidelines.
Takeovers Panel announces appointment of new Chief Executive
Ms Margaret Bearsley has been appointed to the position of Chief Executive of the Takeovers Panel, with effect from 1 July 2011.
|In the courts||Top|
A recent Court of Appeal decision has confirmed that directors and promoters can face criminal liability with respect to a statement in a registered prospectus or advertisement which becomes untrue after the prospectus or advertisement is first distributed.
The Court of Appeal decision arose out of criminal charges against five directors of the Bridgecorp group currently before the High Court. One of the directors, Mr Steigrad, submitted that there was no offence under section 58 of the Securities Act because a number of counts in the indictment were based on a statement in a prospectus that was correct when the prospectus was first distributed.
The Court of Appeal held that criminal liability under section 58 can arise where a statement becomes untrue (due to a change in circumstance) after the advertisement or registered prospectus is distributed. The Court of Appeal accepted the Crown's submission that accurate disclosure throughout the life of a prospectus or duration of an advertising campaign is essential to the integrity of markets for ongoing offers of securities and in line with the purpose of the Securities Act.
The court has also confirmed that the term "distribute" under section 58 contemplates individual communication. That is, it not only includes "making available, publishing and circulating" but also "communications by letter or by electronic means".
The Court of Appeal decision has clarified the legal position. In practice, public issuers who adopt best practice have processes in place to ensure that registered prospectuses and advertisements remain accurate and not misleading at all times when subscriptions are being taken.
We can expect further guidance from the courts on the application of the liability provisions of the Securities Act (and the scope of the due diligence defence) as Bridgecorp and other finance company prosecutions continue over the course of this year.
The decision R v Steigrad  NZCA 304 is available here.
The Securities Regulations 2009 have been updated by the Securities Amendment Regulations 2011. Most of the changes have been made to align the regulations with the Financial Markets Authority Act 2011, the Securities Amendment Act 2011, the Securities Markets Amendment Act 2011 and the KiwiSaver Amendment Act 2011 all of which formed part of the Financial Markets (Regulators and KiwiSaver) Bill passed in April. The changes also align the 2009 Regulations with the Financial Advisers Act 2008, which came fully into force on 1 July.
Investment Statement amendments
The amendments include changes to Schedule 13 of the 2009 Regulations, which specifies matters required in investment statements, so that:
A new schedule has been added to the Securities Regulations 2009 setting out the information, statements, and other matters which must be included in a registered prospectus relating to an offer of interests in a KiwiSaver scheme (other than a "restricted scheme" as defined in the KiwiSaver Act 2006).
Additional changes have also been made to reflect the structural changes to KiwiSaver schemes effected by the KiwiSaver Amendment Act 2011.
The new regulations came into force on 1 July, but there are transitional provisions which provide that no change is required for investment statements dated earlier than 1 August 2011.
There are also separate transitional provisions specifying when these amendments are to apply to a prospectus or investment statement relating to interests in an existing KiwiSaver scheme.
Additional policy decisions for the Securities Law review
The Government has released details of its latest decisions on matters arising out of the Securities Law Review. These follow on from its earlier policy decisions announced in March 2011 (see Issue No. 9 of Corporate Reporter for details). An exposure draft of a securities law bill which will give effect to these decisions is expected to be made available for public consultation next month.
The latest round of decisions cover outstanding issues raised for further consideration in the March 2011 Cabinet Paper, namely:
Framework for securities exchanges
The Government has decided to move to a more comprehensive and flexible regime for securities and derivatives exchanges in line with the recommendations of the Capital Market Development Taskforce. This is intended to facilitate the development of more lightly regulated markets that small, growth companies can use as stepping stones to larger, more heavily regulated markets.
This approach will include:
Liability regime for securities law
Further decisions have been made on the detail of the securities law liability regime, which is to take a more Code-like approach to offences and penalties.
The key features of the regime which are new are:
To give effect to the Government's earlier decision to introduce an escalating hierarchy of liability, Cabinet has agreed to six broad tiers of liability. The table below sets out general details on the proposed tiers of liability and the perceived benefits that will arise from the new structure. A full list of breaches that will come within each tier will not be known until the exposure draft of the new bill is released in August.
Details of offences
|Tier 1||Infringement notice of up to $20,000; and Infringement offence of up to $50,000||
• Strict liability offences (e.g. failure to keep a register of security holders)"
• Primarily for breaches by a corporate
• No conviction may be entered for offences
• Will lead to more effective enforcement of relatively minor contraventions
• Improve deterrence for these sort of matters
|Tier 2||Civil penalty of up to $200,000 for individuals or $600,000 for corporates, plus compensation orders||
• Designed to deal with negligent breaches of more serious securities law breaches (e.g failure to comply with a FMA order under Tier 2 or breach of insider trading obligations under Tier 3
• No need to prove a mental element to the breach for a civil penalty or order to pay compensation
|• Will lead to more cases being settled before going to trial|
|Tier 3||Civil penalty of up to $1,000,000 for individuals or $5,000,000 for corporates (or the greater amount of the consideration or 3 times the gain made or loss avoided for certain conduct on securities markets), plus compensation orders.|
|Tier 4||Imprisonment for a term of up to 3 years and/or a fine of up to $200,000 for individuals or $600,000 for corporates.||
• Tier 4-6 liability is for intentional or reckless breaches of more serious securities law obligations.
• Examples of offences include:
- Misleading or deceptive Product Disclosure Statement (Tier 4);
- Contravention of ongoing disclosure requirements for debt and managed investment schemes (Tier 5);
- Knowing or reckless inclusion of a false statement in a product disclosure statement with intent to induce a person to subscribe to a security or device/cause loss or advance property. (Tier 6)
• A slightly broader range of matters will be subject to criminal offences but a higher mens rea element will be required before a person can be convicted of these offences.
• Will include a comparable offence for section 242 of the Crimes Act
|Tier 5||Imprisonment for a term of up to 5 years and/or a fine of up to $1,000,000 for individuals or $5,000,000 for corporates.|
|Tier 6||Imprisonment for a term of up to 10 years and/or a fine of up to $1,000,000 for individuals or $5,000,000 for corporates.|
To assist in achieving faster resolution of legal proceedings, the FMA's current power to seek enforceable undertakings by market participants is to be extended so that an enforceable undertaking can be used as a formal mechanism to enter into a settlement with a market participant.
The Government has decided not to prohibit celebrities from endorsing a financial product nor include specific provisions for celebrities endorsing financial products or services. However, celebrities will be exposed to significant pecuniary penalties where they consent to being identified in a product disclosure statement or advertisement as having made a statement which is misleading or deceptive (under Tier 3 of the proposed liability regime).
Review of various portfolio management and broking services
The Government is also reviewing certain portfolio and broking services which are currently regulated under the Financial Advisers Act 2008, such as discretionary portfolio management services provided through wrap platforms, to determine whether they would fit more appropriately in the new securities legislation.
The Ministry of Economic Development has released a discussion document (together with a Q & A) which considers a range of potential changes to the fees and levies that fund the institutions that regulate New Zealand's corporate environment and financial markets. This is partly to address the recent changes to these institutions, including the establishment of the Financial Markets Authority (FMA) in May and the External Reporting Board (XRB) which replaced the Accounting Standards Review Board on 1 July 2011. It also addresses the funding shortfalls the Companies Office and the Insolvency and Trustee Service currently face.
Funding the FMA
The FMA's budget, which reflects an increase of around 44 per cent over its predecessors' combined budgets, is to be funded by a combination of Crown funding, direct fees for services (such as, the Authorised Financial Adviser (AFA) authorisation fee), targeted levies and a new FMA levy.
The FMA levy is proposed for the additional funding required for the FMA's general monitoring, supervision, surveillance, and investigation of financial markets. The preferred option is to only levy financial service providers who are required to be registered under the Financial Service Providers (Registration and Dispute Resolution) Act 2008 and issuers who are required to file financial statements under the Financial Reporting Act 1993, so that the greater share of the FMA levy is targeted at firms who are more heavily involved in New Zealand's financial markets. This would be in addition to the Financial Advisers Act 2008 (FAA) levy being proposed for Qualified Financial Advisers, AFAs and registered financial advisers to contribute to the funding required by the FMA, the code committee and the disciplinary committee, in performing their functions and duties under the FAA.
Other options being explored are applying the FMA levy to a broader range of companies and other organisations that fall under the FMA regulatory regime and combining the FMA and FAA levies.
The FMA will also be funded by a proposed "auditor levy" on each licensed auditor under the Auditor Regulation Act 2011 for the FMA's new auditor oversight function expected to begin on 1 July 2012 (although some preliminary work will need to be done by the FMA before then).
Funding the External Reporting Board
An XRB levy of $10 is being proposed for all companies and other entities that prepare financial reports to meet the forecast shortfall in the funding of the XRB.
In response to a recent fees review of the Companies Office, MED is proposing the following changes for companies:
Changes are also proposed to the registration and annual return fees for limited partnerships, building societies, credit unions, industrial and provident societies, friendly societies, and contributory mortgage brokers.
Personal Property Securities Register
Fees are also being revised for the Revised Personal Property Securities Register, as the current fees no longer cover the costs associated with the register.
The closing date for submissions is 8 July 2011. The new fees and levies are expected to commence by 1 February 2012.
For further details click here.
|Financial adviser regime developments||Top|
On 1 July all of the remaining provisions of the Financial Advisers Act 2008 (FAA) came into force. These included:
Now, financial advisers who advise on category 1 investment products or offer investment management and planning services:
Financial advisers must also use a standard disclosure document that shows whether they are being paid fees, commissions or other financial and non-financial benefits.
Financial advisers and the services they can offer can be checked on a public register available at www.fspr.govt.nz.
Note that under the Canterbury Earthquake Response and Recovery Act 2011, Canterbury-based advisers have an extended deadline until 1 October 2011 to finalise their authorisation and meet their other obligations under the FAA.
Financial Advisers (Definitions, Voluntary Authorisation, Prescribed Entities, and Exemptions) Regulations 2011
These regulations, which came into force on 1 July 2011, amend the Financial Advisers (Definitions, Voluntary Authorisation, Prescribed Entities, and Exemptions) Regulations 2011 by:
For details of the policy decisions relating to these regulations see the Cabinet Paper released last month.
Class exemption for Australian financial service providers
The FMA has granted a class exemption from key provisions of the Financial Advisers Act 2008 and the Financial Service Providers (Registration and Dispute Resolution) Act 2008 to permit Australian regulated firms to continue providing financial adviser services for New Zealand based clients, provided certain conditions are met.
Firms that hold current Australian financial services licences granted by the Australian Securities and Investments Commission (and their specified representatives) may utilise this exemption when providing personalised services from Australia to retail clients in New Zealand. They must not have a place of business in New Zealand and must provide the services from a place of business in Australia.
The Financial Advisers (Australian Licensees) Exemption Notice 2011 came into force on 1 July 2011 and expires on 30 June 2013. It is a temporary exemption to allow time for more permanent mutual recognition arrangements to be considered with Australia.
For more information on this class exemption visit the FMA’s website here.
Revised Adviser Business Guide for AFAs
The AFA Adviser Business Statement Guide was updated in June 2011. Authorised Financial Advisers will need to familiarise themselves with the updated language and references in the new Guide and make any changes when they next update their ABS.
On 16 June, the Minister of Commerce released an exposure draft of the Commerce (Cartels and Other Matters) Amendment Bill. The Bill follows a MED discussion document released in January 2010 seeking feedback on whether New Zealand should criminalise "hard-core" cartel conduct so as to optimise cartel deterrence, and to ensure international/trans-Tasman harmonisation.
The major changes to the Commerce Act proposed in the Bill are set out below.
Introduction of criminal liability for "cartel" behaviour
The Bill introduces a new provision prohibiting any person from entering into, and/or giving effect to a 'cartel provision' and consequently repeals the existing prohibition in section 30 of the Act.
The Bill defines a 'cartel provision' as a provision of a contract, arrangement or understanding which has the purpose of fixing prices, restricting output, allocating markets and rigging bids.
The terms "fixing prices", "restricting output", "allocating markets" and "rigging bids" are each defined in the Bill. In broad terms, in relation to agreements between competitors the Bill defines:
The new prohibition focuses on the purpose of the provision and excludes reference to the effect or likely effect of a provision. The Explanatory Note to the Bill explains that the focus on purpose is designed to remove the uncertainty associated with an effects based test where criminal liability can attach for a breach.
Criminal liability only attaches where a person knowingly enters into, or gives effect to, an arrangement containing a cartel provision. This knowledge element attaches on top of the requirement that the provision has a purpose of "fixing prices", "restricting output", "allocating markets" and "rigging bids".
The criminal offence provides for a maximum 7 year imprisonment term for individuals.
The existing civil liabilities will run alongside the new criminal offence and does require knowledge. For bodies corporate and individuals, the maximum penalty remains the same as the current maximum civil penalties.
Proposed exemption for collaborative activity
The Bill proposes a new exemption for 'collaborative activity' which replaces the existing joint venture exemption in section 31 of the Act.
The proposed exemption, as drafted, applies to all 'collaborative activity' which is reasonably necessary to achieve the purpose of the collaborative activity, and is not carried on for the dominant purpose of lessening competition. The exemption is intended to capture all pro-competitive arrangements, regardless of their form, and use of the term 'dominant' is intended to reflect that objective.
The exemption is only from the cartel prohibition; the general prohibition on arrangements which 'substantially lessening competition' will continue to apply.
Other proposed exemptions
The Bill also proposes an exemption in relation to bid rigging arrangements, where the parties to the arrangement have advised the person running the bid of the arrangement, and that person has agreed to the arrangement. The rationale behind this proposal is recognition that there can be pro-competitive collaboration between bidders in the bidding process (e.g. in the form of consortium bids or mutual discounts).
Additionally, the Bill clarifies the collective acquisition exemption by explicitly providing that an individual purchasing following a collective negotiation is exempt. The exemption also will apply to situations where an intermediary takes title to the goods and resells or resupplies them to another party to the arrangement.
Notably, the Bill proposes to repeal the existing exemption for price recommendations made by trade associations with 50 or more members. The rationale being that there is little economic justification for the exemption and the OECD has specifically recommended it be repealed.
The Bill proposes to introduce a clearance regime for arrangements which may breach the cartel prohibition. The clearance regime is intended to manage any residual uncertainty around the scope of the prohibition and the accompanying exemptions.
To obtain a clearance the Commerce Commission must be satisfied that:
The effect of a clearance is to exempt the agreement from sections 27, 29 and 30(1) of the Act.
The Bill also proposes a transitional clearance regime which would enable parties to obtain clearance for arrangements entered into in the six months before the criminal regime comes into force.
Additionally, the Bill proposes to extend the scope of the existing authorisation regime to arrangements containing cartel provisions.
Following the approach in Australia, guidelines will be developed to give greater clarity on the circumstances where the Commission would pursue criminal as opposed to civil prosecution. Factors to be considered include whether the cartel is longstanding, the harm or potential harm caused to the market and whether the participants have previously been involved in cartels.
|New Zealand Commerce Commission (NZCC)||Top|
The NZCC has issued the following media releases:
Mergers and acquisitions
Commerce Commission authorises Cavalier Wool's purchase of Wool Services International's wool scouring assets
The NZCC has granted authorisation for Cavalier Wool Holdings to acquire all of the wool scouring assets of New Zealand Wool Services International.
Click here for more
Commerce Commission grants Comfort Group clearance to acquire Dunlop Living
The NZCC has granted clearance for New Zealand Comfort Group Limited to acquire all of the business assets of Dunlop Living Limited. The clearance is given subject to the merged entity selling the foam underlay manufacturing business currently owned by Dunlop Living.
Click here for more
Statement of preliminary issues for Matariki Forests' clearance application to acquire the Selwyn Plantation Board
The NZCC has published a statement of preliminary issues relating to an application received from Matariki Forests seeking clearance to acquire the forestry assets of the Selwyn Plantation Board. Matariki Forests and the Selwyn Plantation Board both supply sawlogs and pulp-logs in the Canterbury and West Coast regions.
Click here for more
Commerce Commission reaches preliminary view to approve Palmerston North private hospital merger
The NZCC has reached a preliminary view that it should allow Southern Cross Hospitals Limited and Aorangi Hospital Limited to merge their Palmerston North private hospitals. The NZCC will release the final determination on the proposed merger by 29 July 2011.
Click here for more
$5.2 million in new penalties for price fixing in freight forwarding industry
The High Court at Auckland has ordered three international freight forwarding companies to pay penalties totalling $5.2 million plus costs for breaches of the Commerce Act. The companies, BAX Global Inc, Schenker AG and Panalpina World Transport (Holdings) Ltd had reached settlements with the NZCC, which have now been accepted by the High Court.
Click here for more
Commerce Commission releases draft capital expenditure input methodology for Transpower
The NZCC has released its draft determination and reasons paper on an input methodology for approving Transpower New Zealand Limited's capital expenditure proposals.
Click here for more
|Australian Competition and Consumer Commission (ACCC)||Top|
Selected ACCC media releases
The ACCC has issued the following media releases:
Mergers and acquisitions
ACCC grants interim approval to Qantas and American Airlines joint business agreement
The ACCC has granted interim authorisation for a proposed Joint Business Agreement (JBA) between Qantas and American Airlines. Under the proposed JBA, the airlines will coordinate operations on services between Australia/New Zealand and the United States, and on their respective services which support the trans-Pacific routes. Qantas and American Airlines do not currently compete directly on any routes.
Click here for more
ACCC delivers final decision on Australia Post's business mail prices
The ACCC has issued its final decision on a proposal from Australia Post to increase prices across a number of its monopoly business mail letter services. The ACCC has confirmed its earlier preliminary view that it should not object to Australia Post's revised proposal.
Click here for more
ACCC begins public inquiry into final access determination for regulated transmission services
The ACCC has issued a discussion paper to commence a public inquiry into making a final access determination for regulated transmission services.
Click here for more
ACCC issues mobile terminating access service pricing discussion paper
The ACCC has issued a discussion paper to commence an inquiry into the domestic mobile terminating access service under the new telecommunications access regime.
Click here for more
ACCC issues guidance on fibre and cable broadband 'speed' claims
The ACCC has published an Information Paper to assist providers of hybrid fibre-coaxial (HFC) and fibre to the premises (FTTP) broadband internet services in complying with the Competition and Consumer Act 2010. The Information Paper provides guidance to ISPs on the factors to consider when making representations regarding the data transfer rates – or 'speeds' – available to customers acquiring HFC or FTTP internet services.
Click here for more
Mobile premium service providers penalised $375,000
The Federal Court in Sydney has imposed penalties totalling $375,000 against two Australian companies, Global One Mobile Entertainment Ltd and 6G Pty Ltd for false and misleading advertisements for mobile premium services. In promoting its services, Global One or 6G represented that a consumer could purchase the service at a one-off cost when in fact the consumer was actually requesting access to an ongoing premium rate mobile subscription.
Click here for more
Court penalises online ugg boot trader over Australian made claims
Online trader Marksun Australia Pty Ltd has been penalised $430,000 for engaging in false and misleading conduct following action by the ACCC in the Federal Court in Perth. As part of the penalty, $100,000 was ordered against Marksun for unauthorised use of the Australian made logo.
Click here for more
In addition to the Corporate Reporter, Bell Gully also produces one-off client updates on corporate matters of particular significance. During the period covered by this issue of the Corporate Reporter we have published the following client updates:
Authorisation confirms relevance of global competition dynamics in competition assessments – acting locally, thinking globally
The Commerce Commission recently granted the first business acquisition authorisation for over a decade in a decision which confirmed the relevance of global competition dynamics in authorisation assessments. Read on
New PIE rules for non-resident investors
In this article, Bell Gully review and discuss new legislation which proposes to align the rules for non-resident investors in Portfolio Investment Entities with those for direct investment. Read on
More than a game – the business of sport and competition off the field
Sport is more than just a game. And while many will argue that sport is about passion, dedication and pride, it is quite evident that today sport is a significant commercial enterprise in its own right. Read on
Court ruling extends protection for transferring employees
The Employment Court ruled in late May that in a subsequent contracting situation a senior employee with some managerial or at least supervisory responsibilities (and a minority shareholding in a parent company of his employer) was entitled to elect to transfer to the incoming contractor (Matsuoka v LSG Sky Chefs New Zealand Ltd). Read on
Legislation for New Zealand's last frontier
The Minister for the Environment, the Hon Nick Smith, has announced that the Government is to introduce new legislation for the Exclusive Economic Zone and the Extended Continental Shelf. Read on
NEED MORE INFORMATION?
For more information on any of the items in the Corporate Reporter, please contact your usual Bell Gully adviser or any member of Bell Gully's Corporate or M&A teams. Alternatively, you can contact the editor Diane Graham by email or call her on 64 9 916 8849.
© Bell Gully 2011