The Government has just announced that it will fast track new measures to protect New Zealand's national interest during the "COVID-19 crisis".
Chapman Tripp welcomes the changes and fast-track measures announced today. In our previous Brief Counsel we predicted measures like these, to increase screening to protect vulnerable industries from aggressive takeover, and pushed for the Government to fast-track relief for listed companies (a change we have advocated for throughout recent consultation). These changes could facilitate beneficial investment, at the time it’s most needed, paired with the overall protection offered by the national interest test.
- bringing forward the introduction of the national interest test
- changes to reduce the number of transactions caught in the screening regime, including purchases by fundamentally New Zealand companies and small changes in existing shareholdings,
- removing dollar value thresholds for certain transactions (temporary only) by bringing forward the introduction of the call in power, and
- improvements to the screening regime, such as imposing timeframes for decision making and refining the investor test.
Overseas investments not already subject to screening will temporarily need to be notified where the transaction:
- grants the overseas person control of more than 25 per cent of an existing business,
- increases an overseas persons' existing level of control in a New Zealand business, or
- results in the acquisition of more than 25 per cent of a New Zealand's business' assets (by value).
These transactions will be reviewed to determine whether they are contrary to New Zealand's national interest. It is expected the vast majority of notified transactions will proceed quickly, without any government intervention.
The temporary call in measures will be replaced with permanent call in powers which will be legislated for now.
The changes are expected to be in force by mid-June following a truncated select committee process.
See Chapman Tripp’s earlier
commentary, the Cabinet paper,
Minister’s statement and
Treasury fact sheets for more information.