Changes Likely In Reserve Bank Act

Press, Volume CIII, Issue 30539, 7 September 1964, Page 1

Changes Likely In Reserve Bank Act

(New Zealand Press Association) WELLINGTON, September 6. The Government’s intention to include in Reserve Bank legislation authority for interference in take-over bids from abroad is expected to accelerate consolidation of the Reserve Bank Act.

The act has been much tinkered with since it was passed in 1933. The bank is preparing the consolidation. Although it has yet to reach the law draftsmen, it remains on the legislative slate for the current session.

The most recent thought of Cabinet members has been to include a fiscal control on overseas take-overs in the Finance Emergency Regulations, 1940. These are the last remaining wartime ordinances which once regulated most aspects of the economy. When Government surveillance of bids for the “Dominion” reached a climax earlier this year, Ministers found they could use the regulations to stop an effective purchase from abroad by the exchange of shares method.

The regulations are not adequate, however, to deal with an outright cash offer to buy. Both parties have agreed that the regulations are so important that, as a principle, they should be embodied in statute. The coming consolidation offers that opportunity—but it may not be ready before the end of the session. There is no intention at present to take action on domestic take-overs, or on the question of monopoly. Minor aspects of these can be dealt with under trade practices law. The Government may require a compulsory register of overseas investment in New Zealand. This can be done through an amendment to the Companies Act, perhaps next year.