AP784988CRV - Insurance Industry Award 1998
SUBSIDIARIES, HOLDING COMPANIES
AND RELATED CORPORATIONS
Deemed subsidiary
(1) For the purposes of this code, a corporation shall, subject to subclause (3), be deemed to be a subsidiary of another corporation if:
(a) that other corporation:
(i) controls the composition of the board of directors of the first-mentioned corporation;
(ii) is in a position to cast, or control the casting of, more than one-half of the maximum number of votes that might be cast at a general meeting of the first-mentioned corporation; or
(iii) holds more than one-half of the issued share capital of the first-mentioned corporation (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital); or
(b) the first-mentioned corporation is a subsidiary of any corporation that is that other corporation's subsidiary (including a corporation that is that other corporation's subsidiary by another application or other applications of this paragraph).
Deemed control
(2) Without limiting by implication the circumstances in which the composition of a corporation's board of directors is to be taken to be controlled by another corporation, the composition of a corporation's board of directors shall be taken to be controlled by another corporation if that other corporation, by the exercise of some power exercisable whether with or without the consent or concurrence of any other person by that other corporation, can appoint or remove all or a majority of the directors, and for the purposes of this provision that other corporation shall be deemed to have power to make such an appointment if:
(a) a person cannot be appointed as a director without the exercise in his/her favour by that other corporation of such a power; or
(b) a person's appointment as a director follows necessarily from him/her being a director or other officer of that other corporation.
Nature of shareholding
(3) In determining whether one corporation is a subsidiary of another corporation:
(a) any shares held or power exercisable by that other corporation in a fiduciary capacity shall be treated as not held or exercisable by it;
(b) subject to paragraphs (c) and (d), any shares held or power exercisable:
(i) by any person as a nominee for that other corporation (except where that other corporation is concerned only in a fiduciary capacity); or
(ii) by, or by a nominee for, a subsidiary of that other corporation, not being a subsidiary that is concerned only in a fiduciary capacity,
shall be treated as held or exercisable by that other corporation;
(c) any shares held or power exercisable by any person by virtue of the provisions of any debentures of the first-mentioned corporation, or of a trust deed for securing any issue of such debentures, shall be disregarded; and
(d) any shares held or power exercisable by, or by a nominee for, that other corporation or its subsidiary (not being held or exercisable as mentioned in paragraph (c)) shall be treated as not held or exercisable by that other corporation if the ordinary business of that other corporation or its subsidiary, as the case may be, includes the lending of money and the shares are held or the power is exercisable only by way of security given for the purposes of a transaction entered into in the ordinary course of business in connection with the lending of money, not being a transaction entered into with a person associated with the other corporation or its subsidiary.
Holding company
(4) A reference in this code to the holding company of a company or other corporation shall be read as a reference to a corporation of which that last-mentioned company or that other corporation is a subsidiary.
Related corporations
(5) Where a corporation:
(a) is the holding company of another corporation;
(b) is a subsidiary of another corporation; or
(c) is a subsidiary of the holding company of another corporation,
that first-mentioned corporation and that other corporation shall, for the purposes of this code, be deemed to be related to each other.
