Under the Takeovers Code (Code), a person and
their associates are prohibited from becoming the holders or
controllers of 20% or more of the voting rights in a company with
50 or more shareholders and 50 share parcels (Code
Company), except in a manner permitted by the Code.
The Takeovers Panel has now granted a new class exemption
(Exemption) allowing Small Code Companies, being
unlisted companies with $20 million or less in total assets
(Small Code Companies), to issue shares without
the need to observe the "fundamental rule" in the
Code. This rule prevents a person from becoming the holder or
controller of 20% or more of the voting rights in a Code Company
except in accordance with the Code, being by making a full or
partial offer, by shareholder approved acquisition, via the 5%
creeping exception or by compulsory acquisition for holdings of 90%
and above.
