Restrictions On Shares Eased

Press, Volume CIX, Issue 32222, 14 February 1970, Page 1

Restrictions On Shares Eased

(New Zealand Press Association » WELLINGTON, February 13. The Cabinet had decided to pennit, in special circumstances, New Zealand investment in overseas parent companies engaged in development projects in this country, the Minister of Finance (Mr Muldoon) said tonight.

The Government’s normal policy, he said, was to allow New Zealand participation in such projects by I he taking up of shares in New Zealand-registered subsidiary companies directly controlling the New Zealand operations of the foreign company. | This procedure ensured ; that New Zealand share in- * vestment was in the New ! Zealand project and not in

;|some wider-based enterprise, j It had now been decided ’•that in special circumstances. “ and subject to special condiI j tions. New Zealand invest>!ment would be permitted in Jan overseas parent company .’engaged in development pro ■| jects in this country. Investments of this kind !l would be considered: • Where the funds were sup- , plied for the purposes of the new capital expendiI ture in New Zealand on a project of national importance, particularly the 1 development of natural resources.

Where a substantial longterm capital inflow was associated wtth the investment.

Where the investment project was deemed to be desirable and the execution of it was dependent to a greater or lesser extent on some capital being raised in New Zealand.

Mr Muldoon said that where all or most of the above criteria were met to the Gov ernment's satisfaction approval to limited New Zealand investment in parent company shares would be given by the Reserve Bank, subject to the setting up of a separate share register in New Zealand to which special conditions would apply. The conditions would provide for capital and dividends on the shares to be payable only in New Zealand currency.

The shares would not be transferable to an overseas register, except with the specific approval of the Reserve Bank. This approval would only be given if payment for the shares was remitted to New Zealand through the banking system. I The special conditions were * necessary to ensure that a ; direct outflow of foreign ex- | change did not result from * the taking up of the shares, ihe said.