20 November 2019
AGMs approve constitutional changes to facilitate growth investment without compromising mutual ownership.
RACQ joins CUA, Australian Unity, Heritage Bank, AMB in making these changes at their latest AGMs.
The Business Council of Co-operatives and Mutuals congratulates its member, RACQ as they make constitutional amendments under new Corporations Act legislation passed in April this year. The Mutual Capital Instruments (MCI)s, which will be the vehicle for equity investment in mutuals, are new to the Australian co-op and mutual sector. Yesterday RACQ held its AGM where members passed the constitutional changes necessary to pave the way for future fundraising with MCI.
BCCM’s CEO, Melina Morrison says, “We congratulate RACQ on making these changes to its constitution, which is setting the stage for future capital raising without risk of demutualisation.
In this era of accountability marked by royal commissions, we are delighted that members like RACQ will be better able to take on large listed companies without compromising their mutual ownership.
We are pleased that our members have achieved legal recognition for their different model. That is the real difference in our sector, which is all about the customer – not shareholder – interests.”
In 2015, BCCM began advocating on behalf of its members for legislative changes that would allow mutuals to raise capital in order to grow and compete with larger listed entities. Bringing external investment capital into mutuals had previously triggered waves of demutualisation.
BCCM is pleased to have played a part in helping to create a more enabling environment for mutuals.
Mr Greg Hammond OAM conducted the Independent Facilitator Review Report on Reforms for Cooperatives, Mutuals and Member-owned Firms in 2017. Then Treasurer Scott Morrison accepted all recommendations of this review.
In April 2019, legislation was passed by both houses of parliament.
The Treasury Laws Amendment (Mutual Reforms) Bill 2019 implements the following key reforms:
- Defining a mutual entity
- Reforming the demutualisation rules to only be triggered in an intended demutualisation
- Creating a mutual specific Mutual Capital Instrument (MCI)