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Companies Act 1993

Directors and their powers and duties - Transactions involving self-interest

147: Relevant interests to be disregarded in certain cases

You could also call this:

“Some situations where your share ownership interests don't count”

When you own shares in a company, you have what’s called a “relevant interest”. However, in some cases, your relevant interest doesn’t count. This is important for understanding section 148.

Your relevant interest doesn’t count if:

You’re in the business of lending money or providing financial services, and you only have the relevant interest as security for a loan or service you’ve provided.

You’re allowed to trade on a licensed market, and you only have the relevant interest because you’re buying or selling shares for someone else as part of your job.

You’re only holding the relevant interest because someone asked you to vote for them at a company meeting. But you need to show the document that proves this before the meeting starts.

You’re a trustee corporation or a nominee company, and you only have the relevant interest because you’re acting for someone else as part of your normal job.

You’re a “bare trustee” of a trust that owns the shares. A bare trustee is someone who doesn’t have any real control over the trust’s property.

Even if you get paid for being a bare trustee, you can still be considered one for this rule.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM320683.

Topics:

Business > Industry rules

Business > Fair trading

146: Meaning of relevant interest, or

“What counts as having control over a company's shares”

148: Disclosure of share dealing by directors, or

“Directors must report their company share ownership and trades”

Part 8 Directors and their powers and duties
Transactions involving self-interest

147Relevant interests to be disregarded in certain cases

For the purposes of section 148, no account shall be taken of a relevant interest of a person in a share if—
the ordinary business of the person who has the relevant interest consists of, or includes, the lending of money or the provision of financial services, or both, and that person has the relevant interest only as security given for the purposes of a transaction entered into in the ordinary course of the business of that person; or
that person is authorised to undertake trading activities on a licensed market and has the relevant interest by reason only of acting for another person to acquire or dispose of that share on behalf of the other person in the ordinary course of business of carrying out those trading activities; or
that person has the relevant interest solely by reason of being appointed as a proxy to vote at a particular meeting of members, or of a class of members, of the company and the instrument of that person's appointment is produced before the start of the meeting in accordance with clause 6(4) of Schedule 1 or by a time specified in the company's constitution, as the case may be; or
that person—
1. is a trustee corporation or a nominee company; and
2. has the relevant interest by reason only of acting for another person in the ordinary course of business of that trustee corporation or nominee company; or
the person has the relevant interest by reason only that the person is a bare trustee of a trust to which the share is subject.

For the purposes of subsection (1)(e), a trustee may be a bare trustee notwithstanding that he or she is entitled as a trustee to be remunerated out of the income or property of the trust.

Notes

Section 147(1)(b): replaced, on 1 December 2014, by section 150 of the Financial Markets (Repeals and Amendments) Act 2013 (2013 No 70).