Part 3FINANCIAL BENEFITS TO RELATED PARTIES OF PUBLIC COMPANIES

PART 3—FINANCIAL BENEFITS TO RELATED PARTIES OF PUBLIC COMPANIES How to read references to provisions of this Law 21. Section 8 of the Corporations Law is amended by inserting in paragraph (5)(c) “Part 3.2A (except subsection 243L(2)),” before “Part 3.5”. 22. Section 9 of the Corporations Law is amended: (a) by omitting the definitions of “control”, “parent entity” and “public company” and substituting the following definitions: “ ‘control’, in relation to an entity, has: (a) in Part 3.2A—the meaning given by section 243E; and (b) in Parts 3.6 and 3.7—the meaning given by section 294B; ‘parent entity’: (a) in Part 3.2A—has the meaning given by subsection 243D(1); and (b) in Parts 3.6 and 3.7—has the meaning given by section 294A; ‘public company’ means a company other than a proprietary company and: (a) in the definition of ‘public corporation’ (in this section) and in paragraph 228(1)(b) and subsection 879(1), includes a body corporate that is a public company for the purposes of the Corporations Law of another jurisdiction; and (b) in section 232A, Part 3.2A and section 1376, includes a body corporate (other than a prescribed body corporate) that: (i) is incorporated, or taken to be incorporated, in this jurisdiction, but not under the Corporations Law of this jurisdiction; and (ii) is included in the official list of a securities exchange; and (c) in Part 3.2A and section 1376, does not include a company in respect of which a licence under section 383 is in force;”; (b) by inserting the following definitions: “ ‘child entity’ has in Part 3.2A the meaning given by subsection 243D(2); ‘financial benefit’ has in Part 3.2A a meaning affected by section 243G; ‘related party’ has in Part 3.2A the meaning given by section 243F; ‘sibling entity’ has in Part 3.2A the meaning given by subsection 243D(3);”. Effect of certain contraventions of this Law 23. Section 103 of the Corporations Law is amended by inserting “232A, 232B, 243H, 243ZE,” after “126,”. Directors to disclose certain interests 24. Section 231 of the Corporations Law is amended: (a) by inserting in subsection (1) “proprietary” before “company” (first occurring); (b) by inserting in subsection (6) “proprietary” before “company” (first occurring). 25. After section 232 of the Corporations Law the following sections are inserted: Voting by interested director of public company “232A.(1) A director of a public company who has a material personal interest in a matter that is being considered at a meeting of the board, or of directors, of the company: (a) must not vote on the matter (or in relation to a proposed resolution under subsection (3) in relation to the matter, whether in relation to that or a different director); and (b) must not be present while the matter (or a proposed resolution of that kind) is being considered at the meeting. Note: In this section, ‘public company’ has an extended meaning: see paragraph (b) of the definition of ‘public company’ in section 9. “(2) Subsection (1) does not apply to an interest that the director has: (a) as a member of the company; and (b) in common with the other members of the company. “(3) Subsection (1) does not apply if the board has at any time passed a resolution that: (a) specifies the director, the interest and the matter; and (b) states that the directors voting for the resolution are satisfied that the interest should not disqualify the director from considering or voting on the matter. “(4) A quorum is not present during the consideration of a matter at a meeting of the board, or of directors, of a public company unless at least 2 directors are present who are entitled to vote on any motion that may be moved at the meeting in relation to that matter. “(5) A general meeting of a public company may deal with a matter in so far as the board cannot deal with it because of subsection (4). “(6) If: (a) someone proposes a resolution of a public company’s board in connection with a general meeting of the company dealing with a matter; and (b) subsection (4) would prevent the proposed resolution from being considered; subsections (1) and (4) do not apply in relation to a motion that relates to the proposed resolution. “(7) If, because of subsection (6), subsection (4) does not apply in relation to a motion that is considered or voted on at a meeting, the directors present must ensure that the minutes record that fact. “(8) A public company’s constitution may restrict a director’s entitlement to vote, or to be present, at a meeting even if this section would not. Commission may exempt directors from section 232A in appropriate cases “232B.(1) The Commission may by writing declare that, for the purposes of all or specified meetings of the board, or of directors, of a company, subsections 232A(1) and (4) do not apply in relation to a specified matter, but may only do so if satisfied that: (a) the matter could not otherwise be dealt with at those meetings because of subsection 232A(4); and (b) because it is urgent or for some other compelling reason, the matter should be dealt with at those meetings and not by a general meeting, even though directors have a material personal interest in the matter. “(2) A declaration may be expressed to apply generally or as otherwise specified, and may be subject to: (a) a specified condition to be complied with, in relation to the matter, by the company or a director; or (b) 2 or more such conditions. “(3) A declaration has effect accordingly. “(4) A company or a director must not contravene a condition. “(5) The Commission may by writing vary or revoke a declaration.”. Loans to directors 26.(1) Section 234 of the Corporations Law is amended: (a) by omitting from subsection (1) “a company shall not” and substituting “a public company must not”; (b) by inserting before paragraph (3)(a) the following paragraph: “(aa) to anything done by a public company to which sections 243H and 243ZE apply because of section 1376;”. (2) Section 234 of the Corporations Law is repealed. 27. After Part 3.2 of the Corporations Law the following Part is inserted: “PART 3.2A—FINANCIAL BENEFITS TO RELATED PARTIES OF PUBLIC COMPANIES “Division 1—Object and outline of Part Object “243A. The object of this Part is to protect: (a) a public company’s resources (in particular, those available to pay the company’s creditors); and (b) the interests of its members as members; by requiring that, in general, financial benefits to related parties that could diminish or endanger those resources, or that could adversely affect those interests, be disclosed, and approved by a general meeting, before they are given. Outline “243B.(1) Division 2 explains expressions used in this Part. “(2) Division 3 sets out the prohibitions that give effect to the object of this Part. “(3) Division 4 creates general exceptions for financial benefits that are consistent with the object of this Part. “(4) Division 5 enables a public company in general meeting to permit a financial benefit not covered by the general exceptions. “(5) Division 6 enforces the prohibitions (section 243ZE), creates some other offences (sections 243ZF and 243ZH) and describes how this Part interacts with other laws (section 243ZI). “Division 2—The meaning of expressions Entities “243C.(1) Each of the following is an entity: (a) a body corporate; (b) a partnership; (c) an unincorporated body; (d) an individual; (e) a trustee of a trust that has only one trustee. “(2) If a trust has 2 or more trustees, those trustees together constitute an entity. “(3) Subject to subsections (1) and (2), if an accounting standard: (a) deals with disclosure in companies’ financial statements of information about related parties (for example, about transactions between companies and related parties); and (b) is in force at a particular time (even if the standard does not apply to a financial year of a company in which that time occurs); and (c) defines the expression ‘entity’; the question of what is or was an entity at that time is to be determined in accordance with the definition in the standard. Parent entities, child entities and sibling entities “243D.(1) An entity is a parent entity of another entity if: (a) both are bodies corporate and the first entity is a holding company of the other; or (b) the first entity has control over the other. “(2) An entity is a child entity of another entity if the other is its parent entity, or is one of its parent entities. “(3) An entity is a sibling entity of another entity if they have a parent entity in common and neither is a parent entity of the other. Control “243E. If an accounting standard: (a) deals with disclosure in companies’ financial statements of information about related parties (for example, about transactions between companies and related parties); and (b) is in force at a particular time (even if the standard does not apply to a financial year of a company in which that time occurs); and (c) provides for determining whether an entity has control over another entity; the question of whether an entity has or had control over another entity at that time is to be determined in accordance with the provision in the standard. Related party of a public company “243F.(1) Each of the following is a related party of a public company: (a) a director of the public company; (b) a director of a body corporate that is a parent entity of the public company; (c) one of the persons constituting an entity (other than a body corporate) that is a parent entity of the public company; (d) a spouse or de facto spouse of such a director or person; (e) a parent, son or daughter of such a director, person, spouse or de facto spouse; (f) an entity (other than a child entity of the public company) over which: (i) a person of a kind referred to in paragraph (a), (b), (c), (d) or (e) has control; or (ii) 2 or more such persons together have control; (g) a parent entity or sibling entity of the public company. “(2) An entity is also a related party of a public company at a particular time if the entity was a related party of the public company because of subsection (1) at any time within the previous 6 months. “(3) An entity is also a related party of a public company at a particular time if: (a) the entity believes at that time, or has at that time reasonable grounds to believe, that it is likely to become an entity of a particular kind at some future time; and (b) by becoming an entity of that kind, it would become at that future time a related party of the public company because of subsection (1). “(4) For the purposes of subsection (3), an entity (other than a body corporate) constituted by 2 or more persons is taken to believe, or to have reasonable grounds to believe, something if at least one of those persons believes, or has such grounds to believe, that thing. “(5) If, at a particular time, an entity: (a) was or is a related party of a public company because of subsection (1), (2) or (3); and (b) acted, or proposes to act, in concert with another entity (‘the associate’) in respect of the giving or proposed giving of a financial benefit (‘the primary benefit’) by the public company, or by a child entity of the public company, to the associate; and (c) so acted, or proposes so to act, for the reason, or for reasons including the reason, that a financial benefit has been given to a related party of the public company or is expected to be so given; the associate is a related party of the public company in relation to the giving or proposed giving of the primary benefit. Giving a financial benefit “243G.(1) A reference to an entity giving a financial benefit: (a) is intended to operate broadly, even though criminal or civil penalties may be involved; and (b) includes a reference to giving a financial benefit indirectly (for example, through one or more interposed entities) or by making or giving effect to a relevant agreement (as defined in section 9). “(2) In deciding whether an entity has given a financial benefit: (a) the economic and commercial substance and effect of what the entity has done is to prevail over its legal form; and (b) any consideration that has been or may be given for the benefit is to be disregarded, even if it is full or adequate. “(3) A benefit that does not involve the payment of money can still be a financial benefit: for example, if it confers some financial advantage. “(4) A few examples of an entity giving a financial benefit to another entity are: (a) the first entity lending the other money, guaranteeing a loan to the other, or providing security for a loan to the other; (b) the first entity forgiving a debt owed by the other, otherwise releasing, or neglecting to enforce, an obligation of the other, or assuming an obligation of the other; (c) the first entity buying or leasing an asset from the other, or selling or leasing an asset to the other; (d) the first entity acquiring services from the other, or supplying services to the other; (e) the first entity issuing securities, or granting an option, to the other; (f) the first entity giving money or property to the other. “Division 3—The prohibitions Prohibited financial benefits to related parties of public companies “243H.(1) A public company must not give a financial benefit to a related party except as permitted by Division 4 or 5. “(2) A child entity of a public company must not give a financial benefit to a related party of the public company except as permitted by Division 4 or 5. Definitions: ‘public company’: see the definition in section 9 (note especially paragraph (b) of the definition); ‘give a financial benefit’: see section 243G; ‘related party’: see section 243F; ‘child entity’: see subsection 243D(2). “Division 4—General exceptions Financial benefit under contract made before section 243H begins to apply “243J.(1) Section 243H does not prevent a public company, or a child entity of a public company, from giving a financial benefit to a related party of the public company as required by a contract made before the day on and after which that section applies to the public company because of section 1376. “(2) Subsection (1) does not apply if: (a) section 234, a corresponding law, or a corresponding previous law, prohibited the making of the contract; or (b) immediately before that day, section 234 or a corresponding law prohibited the public company or child entity from giving the benefit to the related party. Remunerating officers “243K.(1) A body corporate may pay or provide remuneration to a person in a capacity as an officer of the body if it is reasonable for a body corporate in the body’s circumstances to pay or provide that remuneration to an officer in the person’s circumstances. “(2) A body corporate may pay or provide remuneration to a person in a capacity as an officer of the body if: (a) the body does so as required by a contract between the body and the person; and (b) it was reasonable for a body corporate in the body’s circumstances to make that contract with an officer in the person’s circumstances. “(3) An entity may give a financial benefit to a person in the person’s capacity as an officer of a body corporate if subsection (1) or (2) would permit the body itself to give the benefit to the person in that capacity. “(4) Any of the following paid by a body corporate to an officer of the body as such (however the rate or amount is worked out) is remuneration paid by the body to the officer: (a) salary; (b) wages; (c) bonuses; (d) allowances paid for the sole purpose of meeting expenses incurred in connection with performing services as such an officer. “(5) A benefit that is in the nature of a fringe benefit and is provided by a body corporate to an officer of the body as such is remuneration provided by the body to the officer. “(6) A contribution made by a body corporate to a fund for the purpose of making provision for, or obtaining, superannuation benefits for an officer of the body, or for dependants of such an officer, is remuneration provided by the body to the officer. “(7) A financial benefit given to a person because of the person ceasing to hold an office or employment as an officer or employee of a body corporate is remuneration paid or provided to the person in a capacity as an officer of the body. “(8) Subsections (4), (5), (6) and (7) have effect for the purposes of subsections (1), (2) and (3), but nothing in them limits the generality of: (a) the expression ‘remuneration’ in subsections (1) and (2); or (b) anything else in subsections (4), (5), (6) and (7). Advances, up to prescribed amount, to director or director’s spouse “243L.(1) A body corporate may advance money to: (a) a director of the body; or (b) a spouse or de facto spouse of such a director; unless the total of the following would exceed $2,000 or such greater amount as is prescribed: (c) the amount of the advance; (d) each amount (if any) that is still owing and was advanced to the director, spouse or de facto spouse by the body, or by a parent entity, child entity or sibling entity of the body. “(2) For the purposes of subsection (1), an amount already advanced is to be disregarded if, because of this Division (other than this section) or Division 5, section 243H did not prohibit the advance. Financial benefit given to or by closely-held subsidiary “243M.(1) A body corporate may give a financial benefit to a closely-held subsidiary of the body. “(2) A closely-held subsidiary of a body corporate may give a financial benefit to the body, or to a child entity of the body. “(3) For the purposes of this section, a body corporate is a closely-held subsidiary of another body corporate if, and only if, no member of the first-mentioned body is a person other than: (a) the other body; or (b) a nominee of the other body; or (c) a body corporate that is a closely-held subsidiary of the other body because of any other application or applications of this subsection; or (d) a nominee of such a body. “(4) For the purposes of subsection (3), disregard shares that are not voting shares. Financial benefit on arm’s length terms “243N.(1) A public company, or a child entity of a public company, may give a financial benefit to a related party of the public company if it does so on terms and conditions no more favourable to the related party than those on which it is reasonable to expect that the company or entity, as the case may be, would give the benefit directly if dealing with the related party at arm’s length in the same circumstances. “(2) In the case of a loan or other financial accommodation, the matters to consider for the purposes of subsection (1) include, for example: (a) the amount of the loan or the extent of the accommodation; (b) what interest or charges are payable; (c) the credit risk; (d) what security is given; (e) the timetable for repayments of amounts owing and for payments of interest or charges. Financial benefits to members as such “243PA. A public company, or a body corporate that is a child entity of a public company, may give financial benefits to any of its own members, in their capacity as members, on a basis that does not discriminate unfairly, either directly or indirectly, in favour of one or more related parties of the public company. Financial benefit under court order “243PB. An entity may give a financial benefit to another entity pursuant to an order of a court. “Division 5—Financial benefits approved by general meeting of public company “Subdivision A—Exceptions from the prohibitions Financial benefit permitted by resolution of members “243Q. A public company, or a child entity of a public company, may give a financial benefit to a related party of the public company if: (a) a resolution of the public company permits the benefit to be given; and (b) the resolution was passed at a general meeting of the public company held within 15 months before the public company, or the child entity, as the case may be, gives the benefit; and (c) the conditions prescribed by Subdivision B have been satisfied in relation to the resolution. Financial benefit under contract permitted by resolution of members “243R.(1) A public company, or a child entity of a public company, may give a financial benefit to a related party of the public company as required by a contract with the related party if: (a) a resolution of the public company permitted the public company, or the child entity, as the case may be, to make the contract; and (b) the resolution was passed at a general meeting of the public company held within 15 months before the contract was made; and (c) the conditions prescribed by Subdivision B have been satisfied in relation to the resolution. “(2) A reference in this Division to a resolution or proposed resolution permitting a financial benefit to be given by a public company or entity includes a reference to the resolution or proposed resolution permitting the public company or entity to make a contract to give the benefit. Resolution may specify matters by class or kind “243S. A resolution under this Division may specify anything either in particular or by reference to class or kind. Effect of resolution “243T.(1) A resolution of a public company that permits the company to give a financial benefit to a related party does not affect the application of subsection 243H(2) and this Division to the public company in its capacity as a child entity of another public company. “(2) A resolution of a public company that permits a child entity of the public company to give a financial benefit to a related party of the public company does not affect: (a) if the child entity is also a public company—the application of subsection 243H(1) and this Division to the child entity in its capacity as a public company; or (b) in any case—the application of subsection 243H(2) and this Division to the child entity in its capacity as a child entity of another public company. Example: A Ltd, B Ltd and C Ltd are all public companies. X is a director of A Ltd. A Ltd is a holding company of B Ltd, which is a holding company of C Ltd. For C Ltd to give to X a financial benefit not covered by an exception in Division 4, all 3 companies must pass resolutions under this Division permitting the benefit. This is because 3 applications of section 243H prohibit C Ltd from giving the benefit. Subsection 243H(1) prohibits C Ltd as a public company of which X is a related party. Subsection 243H(2) prohibits C Ltd twice: once as a child entity of B Ltd, of which X is a related party, and once as a child entity of A Ltd, of which X is also a related party. Subdivision B—Conditions to be satisfied Company must lodge material that will be put to members “243U.(1) At least 14 days before the notice convening the relevant meeting is given, the public company must lodge: (a) a proposed notice of meeting setting out the text of the proposed resolution; and (b) a proposed explanatory statement satisfying section 243V; and (c) any other document proposed to accompany the notice convening the meeting; and (d) any other document that any of the following proposes to give to members of the public company before or at the meeting: (i) the company; (ii) a related party of the company to whom the proposed resolution would permit a financial benefit to be given; (iii) an associate of the company or of such a related party; and can reasonably be expected to be material to a member in deciding how to vote on the proposed resolution. “(2) If, when the notice convening the meeting is given, the Commission: (a) has approved in writing a period of less than 14 days for the purposes of subsection (1); and (b) has not revoked the approval by written notice to the public company; subsection (1) applies as if the reference to 14 days were a reference to the approved period. “(3) The Commission may give and revoke approvals for the purposes of subsection (2). Requirements for explanatory statement to members “243V.(1) The proposed explanatory statement lodged under section 243U must be in writing and set out: (a) the related parties to whom the proposed resolution would permit financial benefits to be given; and (b) the nature of the financial benefits; and (c) in relation to each director of the company: (i) if the director wanted to make a recommendation to members about the proposed resolution—the recommendation and his or her reasons for it; or (ii) if not—why not; or (iii) if the director was not available to consider the proposed resolution—why not; (d) in relation to each such director: (i) whether the director had an interest in the outcome of the proposed resolution; and (ii) if so—what it was; and (e) all other information that: (i) is reasonably required by members in order to decide whether or not it is in the company’s interests to pass the proposed resolution; and (ii) is known to the company or to any of its directors. “(2) An example of the kind of information referred to in paragraph (1)(d) is information about what, from an economic and commercial point of view, are the true potential costs and detriments of, or resulting from, giving financial benefits as permitted by the proposed resolution, including (without limitation): (a) opportunity costs; and (b) taxation consequences (such as liability to fringe benefits tax); and (c) benefits forgone by whoever would give the benefits. Note: Section 232 requires an officer of a corporation to act honestly and to exercise care and diligence. These duties extend to preparing an explanatory statement under this section. Section 1309 creates offences where false and misleading material relating to a corporation’s affairs is made available or furnished to members. Commission may comment on proposed resolution “243W.(1) Within 14 days after a public company lodges documents under section 243U, the Commission may give to the company written comments on those documents, other than comments about whether the proposed resolution is in the company’s best interests. “(2) The Commission may consult with the Exchange for the purposes of giving comments to a company that is included in the official list of the Exchange or of a securities exchange that is a subsidiary of the Exchange. “(3) Subsection (2) does not limit the persons with whom the Commission may consult. “(4) The Commission must keep a copy of the written comments it gives to a company under subsection (1), and subsections 1274(2) and (5) apply to the copy as if it were a document lodged with the Commission. “(5) The fact that the Commission has given particular comments, or has declined to give comments, under subsection (1) does not in any way affect the performance or exercise of any of the Commission’s functions and powers. Requirements for notice of meeting “243X. The notice convening the meeting: (a) must be the same, in all material respects, as the proposed notice lodged under section 243U; and (b) must be accompanied by an explanatory statement that is the same, in all material respects, as the proposed explanatory statement lodged under that section; and (c) must be accompanied by a document that is, or documents that are, the same, in all material respects, as the document or documents (if any) lodged under paragraph 243U(1)(c); and (d) if the Commission has given to the public company, in accordance with section 243W, comments on the documents lodged under section 243U—must be accompanied by a copy of those comments; and (e) must not be accompanied by any other documents. Other material put to members “243Y. Each document (if any) that: (a) did not accompany the notice convening the meeting; and (b) was given to members of the public company before or at the meeting by: (i) the public company; or (ii) a related party of the public company to whom the proposed resolution would permit a financial benefit to be given; or (iii) an associate of the public company or of such a related party; and (c) can reasonably be expected to have been material to a member in deciding how to vote on the proposed resolution; must be the same, in all material respects, as a document lodged under paragraph 243U(1)(d). Proposed resolution cannot be varied “243ZA. The resolution must be the same as the proposed resolution set out in the proposed notice lodged under section 243U. Voting on the resolution “243ZB.(1) If any votes on the resolution are cast in contravention of subsection 243ZF(1), it must be the case that the resolution would still be passed even if those votes were disregarded. Note: Section 243ZF prohibits voting by or on behalf of related parties to whom a proposed resolution would permit financial benefits to be given. “(2) If a poll was duly demanded on the question that the resolution be passed, subsections (3) and (4) apply in relation to voting on the poll. “(3) In relation to each member of the public company who voted on the resolution in person, the public company must record in writing: (a) the member’s name; and (b) how many votes the member cast for the resolution and how many against. “(4) In relation to each member of the public company who voted on the resolution by proxy, or by a representative authorised under subsection 249(3), the public company must record in writing: (a) the member’s name; and (b) in relation to each person who voted as proxy, or as such a representative, for the member: (i) the person’s name; and (ii) how many votes the person cast on the resolution as proxy, or as such a representative, for the member; and (iii) how many of those votes the person cast for the resolution and how many against. Notice of resolution to be lodged “243ZC. Within 14 days after the resolution is passed, the public company must lodge a notice setting out the text of the resolution. Declaration by Court of substantial compliance “243ZD.(1) The Court may declare that the conditions prescribed by this Subdivision have been satisfied if it finds that they have been substantially satisfied. “(2) A declaration may be made only on the application of an interested person. “Division 6—Enforcement Consequences of giving financial benefit when not permitted “243ZE.(1) This section applies if: (a) a related party of a public company receives a financial benefit from the public company, or from a child entity of the public company; and (b) the public company contravenes subsection 243H(1), or the child entity contravenes subsection 243H(2), by giving the benefit. “(2) The related party contravenes this subsection. Note: If the related party is not itself a legal person, see section 243ZG. “(3) Subject to subsection (4), a person contravenes this subsection if the person: (a) is involved (as defined in section 79) in; or (b) is, by act or omission, directly or indirectly, recklessly concerned in. or party to; the contravention of subsection 243H(1) or (2), or the contravention of subsection (2) of this section. “(4) Neither the public company nor the child entity: (a) is guilty of an offence because of the contravention of subsection 243H(1) or (2); or (b) is taken to be involved in, or concerned in or party to: (i) a contravention of subsection (2) of this section by the related party or by any of the persons constituting the related party; or (ii) a contravention of subsection (3) of this section by a person. Note: In the case of a contravention of subsection 243H(2) by a child entity (other than a body corporate) constituted by 2 or more persons, subsection (4) of this section does not prevent any of those persons from contravening this section. “(5) Subsections (2) and (3) are civil penalty provisions as defined by section 1317DA, so Part 9.4B provides for civil and criminal consequences of contravening, or of being involved in a contravention of, either of them. “(6) In a proceeding against a person for: (a) a contravention of subsection (2); or (b) a contravention of subsection (2) because of section 243ZG, 1317DB, 1317DC or 1317DD; it is a defence if it is proved that the person was unaware of a fact or circumstance essential to the contravention of subsection 243H(1) or (2), as the case requires. Note: Section 103 prevents a contravention of section 243H or of this section from invalidating a transaction. Voting by or on behalf of related party interested in proposed resolution under Division 5 “243ZF.(1) At a general meeting, a vote on a proposed resolution under Division 5 must not be cast (in any capacity) by or on behalf of: (a) a related party of the public company to whom the resolution would permit a financial benefit to be given; or (b) an associate of such a related party. “(2) Subsection (1) does not prevent the casting of a vote if: (a) it is cast by a person as a proxy appointed by writing that specifies how the proxy is to vote on the proposed resolution; and (b) it is not cast on behalf of a related party or associate of a kind referred to in subsection (1). “(3) The regulations may prescribe cases where subsection (1) does not apply. “(4) The Commission may by writing declare that: (a) subsection (1) does not apply to a specified proposed resolution; or (b) subsection (1) does not prevent the casting of a vote, on a specified proposed resolution, by a specified entity, or on behalf of a specified entity; but may only do so if satisfied that the declaration will not cause unfair prejudice to the interests of any member of the public company. “(5) A declaration in force under subsection (4) has effect accordingly. “(6) If a vote is cast in contravention of subsection (1), the related party or associate, as the case may be, contravenes this subsection, whether or not the proposed resolution is passed. Note: If the related party is not itself a legal person, see section 243ZG. “(7) For the purposes of this section, a vote is cast on behalf of an entity if, and only if, it is cast: (a) as proxy for the entity; or (b) otherwise on behalf of the entity; or (c) in respect of a share in respect of which the entity has power to vote as defined in section 30. “(8) Subject to subsection 243ZB(1), a contravention of this section does not affect the validity of a resolution. Contraventions by an entity that is not a legal person “243ZG. If an entity (other than a body corporate) constituted by 2 or more persons contravenes subsection 243ZE(2) or 243ZF(6), then, for the purposes of this Law, each of those persons contravenes that subsection. Retaining records made under section 243ZB “243ZH. For 7 years after the day when a resolution under Division 5 is passed, the public company must retain the records it made under section 243ZB in relation to the resolution. Effect of Part “243ZI.(1) Sections 243H, 243ZE and 243ZF have effect despite anything else in this Law or in any other law of this jurisdiction, or anything in a body corporate’s constitution. “(2) Sections 243J to 243R, inclusive, have effect subject to: (a) this Law (other than this Part); and (b) any other law of this jurisdiction or anywhere else; and (c) the constitution of a body corporate that those sections would otherwise permit to give financial benefits. “(3) Without limiting subsection (2), this Part does not relieve a person of a duty imposed by this Law, by any other law of this jurisdiction or anywhere else, or by a body corporate’s constitution. “(4) Nothing done under this Part relieves a person of such a duty merely because the thing was done under this Part. “(5) In this section: ‘law’ includes a rule of common law or equity.”. 28.(1) Schedule 3 to the Corporations Law is amended by omitting: “Section 234: Penalty: $5,000 or imprisonment for 1 year, or both.”. (2) Schedule 3 to the Corporations Law is amended by inserting before “Section 245:” the following: “Section 243ZF: Penalty: $20,000 or imprisonment for 3 years, or both. Section 243ZH: Penalty: $2,500 or imprisonment for 6 months, or both.”.