ANNUAL REPORT 2001
CHAIRMAN'S REVIEW
John King
This report covers a very significant year for the Takeovers Panel. Although the Panel was established in 1995 it operated on an informal basis before then, having been formed originally as an advisory committee in 1991. The gazetting of the Takeovers Code in October 2000 was the culmination of an extensive period of consultation and debate not only on the provisions of the Code but also on the desirability of having a Takeovers Code in any form.
It is appropriate now to recognise the contribution of past members of the Panel and the advisory committee for their contribution to the formulation of the Code. I refer to Andrew Meehan, Paul Baines, Kerrin Vautier, David Gascoigne and Annabelle Young, as well as Gordon Gilmour and Malcolm Ott who retired in June this year, and Paul Randall, a present member of the Panel, who will be retiring shortly. They contributed many hours of hard work reviewing overseas codes, considering the particular requirements of the New Zealand market, considering submissions from the public, both written and oral, formulating the Code and preparing detailed reports for the Government. I mention particularly Gordon Gilmour and Paul Randall who were two of the original appointments made in 1991. I thank all members, past and present, for their contribution to the introduction of the Code which represents a significant step forward in the approach to regulating takeovers in New Zealand.
I welcome two new Panel members, Colin Giffney and David Quigg. We look forward shortly to the appointment of an Australian member as part of the Government's initiative to develop closer relations between the New Zealand and Australian Takeovers Panels. A member of the New Zealand Panel will also be joining the Australian Panel.
The Code did not become operative until 1 July 2001. After the Code was gazetted in October 2000 the Panel's main task was to prepare itself for the 1 July start date. There was a range of significant events.
The Securities Amendment Act 2001 was passed to enable the Securities Commission to provide administrative and support services to the Panel. This is a more cost effective method of resourcing the Panel than creating a stand alone organisation.
The Takeovers Amendment Act 2001 was passed which made changes to facilitate the operation of the Panel (including authority for the Panel to operate in divisions) and to expand its investigatory powers through the Registrar of Companies.
Class exemptions have been gazetted under the Takeovers Code (Class Exemptions) Notice (No.2) 2001. These exemptions provide a standard form of exemption to apply to common classes of transactions thereby reducing significantly the need for applications for specific exemptions for particular transactions. The terms and conditions of the class exemptions ensure however that the underlying purpose and intent of the Code are fulfilled.
The Takeovers (Fees) Regulations 2001 came into effect on 1 July 2001. These regulations enable the Panel to charge for some of its activities including the granting of exemptions and in certain circumstances the exercise of the Panel's enforcement powers.
As part of the Panel's role in promoting public understanding of the Code the Panel has established a website containing an extensive range of information and initiated a publication Code Word which provides new and relevant information on the Code and the work of the Panel. Code Word is circulated to a wide body of interested parties.
In the period up to 1 July the Panel established systems, procedures and manuals to help it perform its various functions in relation to the Code. The preparatory work is now complete, the Code is operative and the Panel has commenced its new role.
I pay tribute to the staff of the Securities Commission who have played a key role during this preliminary period in ensuring that the Panel is well prepared to undertake its statutory functions.
Looking forward, the Panel will continue to evaluate the need for further class exemptions, particularly in the light of applications for specific exemptions that are received. It will monitor activity in the takeovers market and the operation of the Code. So far as enforcement is concerned, the Panel believes that the underlying purpose and intent of the Code are very clear and is hopeful that the market will quickly adjust to requirements of the Code. However the Panel is resourced with a litigation fund so that it has the ability to take the necessary enforcement action where necessary.
Through its website and Code Word the Panel will continue to keep the market informed of its activities and of issues that arise under the Code. Guidelines and information on procedures will be issued and updated from time to time.
The Panel looks forward to making a significant contribution to the development of an efficient and fair takeovers market in New Zealand.
J.C. King
CHAIRMAN