Govt’s Line Of Thought

Press, Volume CIII, Issue 30512, 6 August 1964, Page 3

Govt’s Line Of Thought

'Parliamentary Reporter) WELLINGTON, August 5. 'Hie Minister of Finance (Mr Lake) indicated the line of Government thinking on its proposed takeover hill in Parliament tonight.

A study had shown that approximately 70 per cent of overseas take-overs were financed by cash remitted to New Zealand through the banking system, said Mr Lake speaking on the second reading of Mr M. A Connelly’s private member’s bill on takeovers.

Another 15 per cent were paid for from funds accumulated in New Zealand by subsidiaries or branches of overseas concerns, he said. The remaining 15 per cent were paid for by the issue

of shares by the bidding company or its subsidiaries in New Zealand or overseas. In most take-over bids the price of the shares being acquired usually rose. This meant sellers had the chance of making a capital gain. Any interference with their rights should be stated quite clearly, and it would be most desirable for any control to have its effect before transactions were completed. “This is why in my Budget statement I suggested control of take-overs might well take the form of a watching brief and a reserve power to intervene where desirable in the public interest,” said Mr Lake. “What 1 had in mind was that take-over offers, which in the majority of cases would in any event have to be notified to the Registrar of Companies, should be registered.

“There would then be a time limit, say a fortnight after registration, during

which the Goverment could state whether it intended to intervene.

“In cases where further scrutiny was required, I would contemplate that there should be a limited time within which the Government’s decision should be announced.”

Mr Lake suggested the disclosure of overseas ownership of shares in New Zealand enterprises in balance sheets or annual returns was worthy of consideration. “We would, in this context, need to look once again at the question of whether private companies should not also file balance sheets and accounts with the registrar, at least where these are controlled from overseas.

“Similarly, provisions for inclusion in share transfers of information about the residence of beneficial holders would enable companies concerned to provide information about the residence of their shareholders.”