No SOE shareholder will be able to own 20%

Brian Gaynor writes:

The Government has to convince the public that these companies will remain majority Crown and New Zealand controlled. This should be easy to achieve because under the Takeovers Code, which wasn’t introduced until 2001, a shareholder must go from 19.99 per cent to 50.01 per cent in one step and this will be impossible to achieve if the Government has at least 50 per cent ownership.

So if I understand this correctly, even if NZers sell shares they buy to an overseas company (presumably for a higher price which means those Kiwi Mums and Dads have made a profit), no company could gain a 20% or greater stake.

Combine this with the liklihood that the NZ Super Fund will also buy significant stakes in the SOEs, and it will be harder for xenophobic opposition to be whipped up.

This won’t stop Labour trying though. Look at this blog post by Labour MP Damien O’Connor which demands the Government stop Asians from buying a private listed company – Wrightsons:

A recent announcement that Agria, an Asian company is applying to raise it’s stake in PGWrightsons from 19% to 51% is one more such move.

So Labour is now against Asians even being able to buy shares in a listed private company. At this rate, they will be able to merge with Winston First.

People must realize that the land is important but only part of our rural economy. The businesses that operate on and associated with it need also to be owned by us unless we are prepared to be servants to our future, not the owners of it.

The translation is that it is not enough that we keep our land out of Asian hands, but also our businesses.

I like how Damien talks about Wrightsons as if it is owned by the state. It is not. It is owned by private shareholders. And no one is forced to do business with it. If people don’t like its shareholders, they don’t have to deal with it.