The Takeovers Panel has granted a class exemption from rule 6(1) of the Takeovers Code for persons who are or become trustees of a charitable trust.
The Takeovers Code (Charitable Trusts) Exemption Notice 2019 grants the exemption from 23 August 2019.
The Panel says it considers the exemption to be consistent with the objectives of the Code, because:
- Every trustee of a registered charitable trust who exercises control over voting rights in a code company in their capacity as a trustee is subject to the duties and obligations arising under the trust deed or other rules governing that trust and at law; and
- The exemption only applies if the appointment of a new trustee or a reduction in the number of trustees relates to a reorganisation of the trust, or an event outside the control of the trustees, and the Code is not intended to inhibit changes in the governance arrangements of charitable trusts; and
- In the case of an appointment of a trustee, there would be no disadvantage to the shareholders of a code company in not having the opportunity to vote on the appointment, as it would have no real effect on those shareholders; and
- The exemption avoids unnecessary compliance costs that would be incurred if it were not granted.
The conditions of the exemption are designed to ensure that the underlying purpose of the Code is still fulfilled. Clause 5 states that the exemption is subject to specified conditions.