Class exemptions
| THE TODD CORPORATION LIMITED (2002/123)
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The Todd Corporation Limited is the investment company for
the Todd family interests. All the shareholders of the company
are members of the Todd extended family or represent interests
associated with that family.
Under the constitution of the company share transfers generally
are tightly controlled by the directors. However the constitution
does allow, at clause 14.1, certain unrestricted transfers of shares
to be made that do not require the approval of the directors.
These transfers are inter-family transfers of shares.
The Code provides a mechanism, at rule 7(c), for non-associated
shareholders to approve acquisitions of increased voting
interests in a Code company by other shareholders. However,
the unusual nature of Todd Corporation in which all
shareholders are members of or represent the interests of the
same family presents special difficulties for the application of
the Code.
Because of the family relationship between the shareholders it
is arguable that all shareholders of Todd Corporation are
“associates” for the purposes of the Code. This means that
anytime a shareholder proposes to increase its shareholding, no
matter how small that shareholding, the increase will be caught
by the Code. If it were proposed to have the change in control
percentage approved by the non-associated shareholders, this
will not be possible because under rule 17 an acquirer’s
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associates are not permitted to vote on a rule 7(c) proposal, and
all shareholders in the company would probably be associates.
The Panel granted a class exemption for every person who
increases his or her control percentage in Todd Corporation as
the result of receiving an unrestricted transfer of shares under
clause 14.1 of the constitution of the company. The exemption
took effect on 1 June 2002 and expires on 31 May 2004.
The Panel decided to grant the exemption provided the
shareholders of Todd Corporation, at a meeting of the company,
supported the proposed exemption. Accordingly the exemption
was granted subject to the conditions that:
- Todd Corporation distributes the notice of meeting containing the exemption resolution to Todd Corporation shareholders in a form approved by the Panel; and
- Todd Corporation shareholders, at the meeting, pass the exemption resolution by both–
- a 75% majority of the total voting rights in Todd Corporation; and
- a 50% majority by number of those shareholders entitled to vote and voting on the resolution at the meeting (whether voting in person or by proxy) and
- the maximum number of voting securities that may be transferred under clause 14.1 of the constitution in any 12-month period is voting securities that carry in the aggregate not more than 10% of the total voting rights in The Todd Corporation at the commencement of the 12-month period.
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