Commonwealth Numbered Regulations - Explanatory Statements

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AUSTRALIAN AND OVERSEAS TELECOMMUNICATIONS CORPORATION REGULATIONS (AMENDMENT) 1993 NO. 9

STATUTORY RULES 1993 No. 9

Issued by the authority of the Minister for Transport and Communications

Australian and Overseas Telecommunications Corporation Act 1991

Australian and Overseas Telecommunications Corporation Regulations (Amendment)

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 two 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 made provision for the merger of Telecom and OTC and provides that the Australian and Overseas Telecommunications Corporation (AOTC) 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 (Amendment) merge OTC Trunked Radio Systems Pty Limited and AOTC. Paragraph 3A(3) (b) of the Act requires merging entities to consist of AOTC and at least one entity that, immediately before the merger of Telecom and OTC was a wholly-owned subsidiary of Telecom or of OTC. Immediately before the merger, OTC Trunked Radio Systems Pty Limited 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 mergers 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 between OTC Trunked Radio Systems Pty Limited and AOTC.

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

Regulation 1 - provides for an amendment to the Australian and Overseas Telecommunications Corporation Regulations.

Regulation 2 - provides that a new regulation 4 be added to previous regulations.

Regulation 2 Para (a) - provides that OTC Trunked Radio Systems Pty Limited and AOTC are a set of merging entities.

Regulation 2 Para (b) - provides that AOTC is the merged entity in relation to the merger.

Regulation 2 Para (c) - provides that 31 January 1993 is the merger day.