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Legislative Assembly for the ACT: 2002 Week 9 Hansard (21 August) . . Page.. 2641 ..

MR STANHOPE (continuing):

Part 7 of the bill deals with cooperatives share capital. It provides for the issue of shares, the disclosure of beneficial and non-beneficial interests in shares and the procedure involved in the transfer of shares, as well as the repurchase of shares. Part of the interface arrangements with the Corporations Act requires that shares may not be held by non-members.

Part 8 of the bill deals with voting. Cooperatives are democratic organisations. This part makes it clear that each member of the cooperative will have only one vote. Voting rights attach to membership, not to shareholding. This part of the bill also provides for the holding of meetings and the passing of resolutions. An ordinary resolution is passed by a simple majority. A special resolution is that passed by a two-thirds majority at a meeting or by post; certain special resolutions must be held by special postal ballot, and this requires a three-quarters majority. A required majority is ascertained by the number of members who at a meeting or in a postal ballot actually vote on the resolution.

Part 9 deals with the management and administration of cooperatives. In particular, it provides for the election of directors and includes provisions for a limited of number of independent directors to be elected to the boards of cooperatives. The majority of directors will still need to be members. Such independent directors will bring additional expertise to the operation of cooperatives either by virtue of being an employee of the cooperative or as otherwise determined in the rules. This part also deals with the duties and responsibilities of directors, and the keeping and auditing of accounts and registers, records and returns.

Part 10 of the bill deals with the funds and property of the cooperatives. Division 1 of this part makes it clear that a cooperative may only obtain financial accommodation, which includes the obtaining of credit or borrowing or raising money by any means, or give security for the repayment of money as provided by its rules and in accordance with the regulations.

The registrar may give a cooperative directions as to the obtaining, repayment or refinancing of financial accommodation. The bill provides for deposit-taking by cooperatives if the cooperative currently has a deposit-taking power. It is intended that existing cooperatives without a deposit-taking power and all new cooperatives will not be able to accept deposits in view of the movement of financial cooperatives to the Financial Institutions Code. Cooperatives may obtain financial accommodation by way of debentures from both non-members and members under appropriate disclosure regimes. Part 10 also provides for the registration of charges and matters in relation to receivers and other controllers of property of cooperatives.

Part 11 of the bill deals with restrictions on the acquisition of shares in cooperatives. The provisions apply only to trading cooperatives. Division 1 sets out requirements relating to relevant interests in the voting rights or shares of members. A relevant interest is not to exceed 20 per cent of the nominal value of the issued share capital of the cooperative. The registrar may increase the maximum percentage in a particular case or approve a special resolution by special postal ballot increasing the maximum percentage. Division 2 of this part places restrictions on offers to purchase shares in a cooperative.

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