re: Ann: T/O Panel ann: CMI Limited Declarati... The takeovers...

re: Ann: T/O Panel ann: CMI Limited Declarati... The takeovers panel decision. {below]


CMI Limited ? Declaration of Unacceptable Circumstances and Orders
The Panel has made a declaration of unacceptable circumstances (Annexure A) in
relation to an application dated 6 January 2011 by Mr Gerry Pauley and Mr Gordon
Elkington, in relation to the affairs of CMI Limited (see TP11/01).
Background
CMI Limited is a listed company (ASX Code: CMI). Mr Raymond Catelan is the
Managing Director of CMI. RP Prospects Pty Ltd, as trustee for the M&L Trust, has a
relevant interest in 36.8% of CMI. RP Prospects is owned by Mr Raymond Catelan.
Ms Leanne Catelan (Mr Raymond Catelan?s daughter) and Mr Raymond Catelan are
identified in the trust deed as beneficiaries of the trust.
On 23 November 2010, Tinkerbell Enterprises Pty Limited, as trustee for the Leanne
Catelan Trust, acquired a relevant interest in 9.22% of CMI. Ms Leanne Catelan and
Mr Raymond Catelan are identified in the trust deed as beneficiaries of the trust.
Tinkerbell is wholly owned by Ms Leanne Catelan. The applicants submitted that
this was the principal transaction that they wanted the Panel to investigate.
Declaration
The Panel considers that the Ms Leanne Catelan and Mr Raymond Catelan (the
Associated Parties) are associated:
1. under section 12(2)(b) for the purpose of controlling or influencing the conduct
of CMI?s affairs, or
2. under section 12(2)(c) in relation to the affairs of CMI.
The Panel further considered that the Associated Parties? voting power in CMI was
previously above the 20% threshold in s606 and the share acquisition by Tinkerbell
occurred without using one of the exceptions in section 611 and that the combined
voting power of the Associated Parties was not disclosed in the substantial
shareholding notice lodged by Tinkerbell on 24 November 2010.
2/4
The factors taken into account by the Panel included:
(a) that the funds to acquire the 9.22% interest in CMI by Tinkerbell were provided
by Mr Raymond Catelan as a gift to Ms Leanne Catelan
(b) the conduct of the Associated Parties and the directors of CMI in relation to the
Tinkerbell acquisition
(c) the family relationship between the Associated Parties and
(d) structural and financial links between the Associated Parties.
The Panel did not consider it against the public interest to make the declaration, and
in making it had regard to the matters in s657A(3).
Orders
The Panel is considering what final orders to make and will publish details in due
course.
The sitting Panel for the proceedings is Peter Day, John Keeves (sitting President)
and Andrew Sisson.
The Panel will publish its reasons for the decision in due course on its website
www.takeovers.gov.au.
Allan Bulman
Director, Takeovers Panel
Level 10, 63 Exhibition Street
Melbourne VIC 3000
Ph: +61 3 9655 3597
[email protected]