OVERSEAS TAKE-OVERS Minister Gives Policy On Intervention

Press, Volume CIII, Issue 30632, 24 December 1964, Page 3

OVERSEAS TAKE-OVERS Minister Gives Policy On Intervention

(.Veto Zealand Press Association)

WELLINGTON, December 23. The Government proposed to keep intervention in overseas takeover bids to a minimum, and only a s mall percentage of take-over proposals was likely to be affected the Minister of Finance (Mr Lake) said tonight.

Mr Lake gave additional details of the method of operation on the overseas take-over regulations effective from today. Issued under the Reserve Bank of New Zealand Act, 1964, the regulations were gazetted tonight.

Mr Lake said overseas investment provided a higher rate of capital formation in New Zealand than would otherwise be possible. It also made available developments in overseas research, design, technological innovation and management methods.

There was a continuing need to attract and encourage worth-while investment from abroad for these purposes, he said. “There is also a need to ensure the preservation of the general freedom of New Zealand residents to employ or dispose of their property as they think fit, subject to the over-riding need of preserving the public interest. “It is, at the same time, Government policy to encourage New Zealand participation in the ownership, control and management of industries,” he said. In considering any proposal the Government would give consideration to the general matters mentioned and, in particular, to the contribution the proposal was likely to make to economic development and growth in New Zealand. Consideration Mr Lake said the following had to be taken into account: the extent to which it was likely efficiently to employ domestic resources, in particular the effects on costs and prices—for example. effects caused by more competition or by the degree of protection sought or by the possibility of monopolistic practices.

Whether it was likely to introduce or provide continuing access to research, design skills and technological developments from overseas not otherwise readily available. The extent to which it was likely to lead to the establishment of new industries or to the desirable expansion of existing industries. The effect of the proposal in the short and long run on the balance of payments —for example, pricing and sources of supply of imports and scope for exports, remittance of profits. interest and dividends, inflow of capital, the ratio of equity capital to fixed interest capital, arrangements for royalties, patents or management fees. Notification Mr Lake said the regulations laid down procedures under which notification must be given where an offer or proposed offer by an overseas person would give the offeror control of 25 per cent or more of the voting rights in a New Zealand company. The definition of overseas persons included companies

and applied whether they acted on their own or jointly with others or through nominees, agents or New Zealand subsidiaries, said Mr Lake. Notice of all such offers supported by the information required by the regulations had to be forwarded to the Registrar of Overseas Takeovers at the Reserve Bank, Wellington, and these would be registered by him forthwith. Within 14 days, the registrar would inform the offeror whether further consideration was required and, where this was deemed necessary by the Minister of Finance, a final determination by him would be made within six weeks of the date of registration of the notice. Advisory Body A small advisory committee drawn from the Reserve Bank and interested departments would assist the Minister in administering the regulations. Mr Lake said Mr D. L. Wilks of the Reserve Bank had been appointed registrar. Because of the confidential nature of proposed takeover offers no provision had been made in the regulations for public inspection of the registrar or of other documents held by the registrar. “I emphasise that the Government does not intend to intervene unless there are clear reasons why a proposed take-over is likely to be harmful to the public interest,” said the Minister.