Bill enables sale of Auck Savings Bank

Press, 13 April 1989, Page 25

Bill enables sale of Auck Savings Bank

PA Wellington Legislation which will enable the sale of 75 per cent of Auckland Savings Bank’s shares to the Commonwealth Bank of Australia was introduced to Parliament yesterday. The Minister of Finance, Mr Caygill, told Parliament the Trustee Banks Restructuring Amendment Bill would change the Trustee Banks Restructing Act, 1988, which could have deterred potential buyers of trustee banks. Although the changes were minor they were significant as they facilitated restructuring of the former trustee banks. The

bill was brought about by the ASB’s sale. Provisions relate to restrictions imposed to protect the Crown’s interests such as requirements for the Minister of Finance to appoint directors, increases in share capital and changes to the company’s articles while the Crown is liable under certain guarantee provisions. He said those Ministerial powers were constraints on the normal powers that a majority shareholder in a bank could expect to exercise on attaining control. “They could be viewed as a deterrent by potential purchasers of shares in

the trustee bank’s successor companies. This of course would be contrary to the intent of the restructuring act whose aim is to facilitate the strengthening of the banks.” The bill would strengthen the trustee banks successor companies through sale of the company’s shares to a substantial shareholder by giving the buyer full powers to control the company while ensuring the Crown’s position under the act’s guarantee clauses was properly protected, he said. Mr Caygill welcomed the ASB’s sale saying its community trustees, including National M.P. for Remuera, Mr Doug Graham, also did.