Adelaide Bank board votes to remove ownership restriction
(29 October 2004 – Australia) The board of Adelaide Bank has voted to recommend removing the provision in its constitution which limits any party’s shareholding to ten percent.
The board had wished to put the proposal to shareholders at this year’s annual general meeting but had received legal advice that this was not possible. Unless the bank arranges a special general meeting before, the issue may not be voted on until the 2005 AGM.
The limitation has been in place since the bank was created in 1994 and was "entrenched" until December 2003 when the provision lapsed, although the ten percent shareholding limit remained.
Adelaide Bank chairman Dick McKay said the existing constitution was out of date in the light of changes to corporate law and ASX listing rules.
He said there was confusion about the lapsing of the entrenchment provisions at the end of December 2003 and the retention of the 10 percent shareholding restriction, with some considering the latter amounts to an anti-takeover mechanism.
"While the bank’s board does not believe that is the case because the restriction can be removed by a vote of shareholders, it has decided to recommend to shareholders the ten percent limit be deleted from the constitution as soon as is practical," McKay said.
The limitation has been in place since the bank was created in 1994 and was "entrenched" until December 2003 when the provision lapsed, although the ten percent shareholding limit remained.
Adelaide Bank chairman Dick McKay said the existing constitution was out of date in the light of changes to corporate law and ASX listing rules.
He said there was confusion about the lapsing of the entrenchment provisions at the end of December 2003 and the retention of the 10 percent shareholding restriction, with some considering the latter amounts to an anti-takeover mechanism.
"While the bank’s board does not believe that is the case because the restriction can be removed by a vote of shareholders, it has decided to recommend to shareholders the ten percent limit be deleted from the constitution as soon as is practical," McKay said.
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