Commonwealth Numbered Regulations - Explanatory Statements

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AUSTRALIAN AND OVERSEAS TELECOMMUNICATIONS CORPORATION REGULATIONS 1992 NO.415

EXPLANATORY STATEMENT

STATUTORY RULES 1992 No. 415

Issued by the Authority of the Minister for Transport and communications

Australian and Overseas Telecommunications Corporation Act 1991

Australian and Overseas Telecommunications Corporation Regulations

Section 42 of the Australian and overseas Telecommunications Corporation Act 1991 (the Act) provides that the Governor-General may make regulations for the purposes of the Act.

Subsection 3A(2) of the Act provides that regulations may declare that 2 or more specified entities are a set of merging entities, that a specified entity is the merged entity and that a specified day is the merger day for the merged entity.

Subsection 3A(1) of the Act makes provision for the merger of Telecom and OTC and provides that the Australian and overseas Telecommunications Corporation is the merged entity arising from the merger, which took place on 1 February 1992. Subsection 3A(2) of the Act deals with the merger of entities other than Telecom and OTC.

The Australian and Overseas Telecommunications Corporation Regulations merge Telecom Australia (International) Limited (TA(I)) and OTC International Limited (OTCI). Paragraph 3A(3)(a) of the Act requires merging entities to be wholly-owned subsidiaries of their principals. Immediately before the merger TA(I) was a wholly-owned subsidiary of Telecom and OTCI was a wholly-owned subsidiary of OTC.

Under subsection 27(1) of the Act no tax is payable under a law of the Commonwealth, State or Territory in relation to the merger of Telecom and OTC or the merger of entities for which regulations made under subsection 3A(2) provide. However paragraph 3A(2)(c) provides that any merger under subsection 3A(2) must occur within 12 months of the merger of Telecom and OTC. Consequently, to gain a tax neutral merger of entities, the merger must occur within 12 months of 1 February 1992.

For this reason the Regulations set the 31 January 1993 as the date of the merger of TA(I) and OTCI.

Details of the Australian and Overseas Telecommunications Corporation Regulations are as follows:

Regulation 1       provides for the citation of the Australian and Overseas Telecommunications Corporation Regulations.

Regulation 2       provides that, unless the contrary intention appears, references to the "Act" means the Australian and Overseas Telecommunications Corporation Act 1991.

Regulation 3 Para(a)       provides that Telecom Australia (International) Limited and OTC International Limited are a set of merging entities.

Regulation 3 Para(b)       provides that OTC International Limited is the merged entity in relation to the merger.

Regulation 3 Para(c)       provides that 31 January 1993 is the merger day.


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