Authority To Deal With Take-Overs Considered

Press, Volume CIII, Issue 30602, 19 November 1964, Page 18

Authority To Deal With Take-Overs Considered

(From Out Own Reporter)

WELLINGTON, November 18. The Minister of Finance (Mr Lake) is considering the establishment of a committee to deal with proposals by overseas companies for taking over New Zealand businesses.

Reviewing the Reserve Bank Bill during a second reading speech in Parliament tonight, Mr Lake said there could be cases where a strategic industry could come under the control of overseas companies and there should be some form of discrimination.

A great deal of work was ■now being done to formulate rules for this and to make regulations but the essential point was notification of takeover plans to some authority which would decide if action was needed. The committee would set criteria which would be published from time to time. Mr Lake said that if the committee recommended intervention the Government’s weapons to block or modify a take-over proposal included new controls over the transfer of securities to as well as from New Zealand and control over the registration of securities in the names of

persons not ordinarily resident in New Zealanl. Mr Lake said the Government proposed to modify provisions in the bill on the application of bank requirements to other organisations than the five trading banks. I As a result of very strong representations from the Stock and Station Agents Association these requirements, including reserve ratios, will apply to organisations in which banking is the “principal” undertaking. i “The legislation was never i intended to apply to stock and .station agents,” he said. A clause requiring the Reserve Bank to have regard to representations made by the I Minister of Finance on its management will be dropped from the bill. | On the question of exchange control Mr Lake said there had been criticism that the measures to require the payments for royalties and commissions to be paid into the banking system was another form of socialism. But the drain on the economy through invisible payments had risen in the last 10 years from £l7 million to £63 million and the Government's move could mean an extra £lO

million in overseas funds from receipts in this sphere.

The alternatives to diverting this income into the banking system were drastic, he said, such as borrowing, cutting imports or reducing invisibles.