Co-Operatives (National Uniform Legislation) Act 2015

(1) A co-operative must not provide financial accommodation to a director, or to a person the co-operative knows or should reasonably know is an associate of a director, unless:

(iii) provided on terms no more favourable to the director or associate than the terms on which it is reasonable to expect the co-operative would give if dealing with the director or associate at arm's length in the same circumstances; and

(b) the directors have approved the accommodation, at a meeting of the board at which a quorum was present, by a majority of at least two-thirds of the directors present and voting on the matter.

Maximum penalty: $50 000.

(2) For the purposes of subsection (1)(a)(i) and (ii), financial accommodation or a scheme is approved if:

(b) the full details of the accommodation or scheme were made available to members at least 21 days before the meeting.

(3) A director or an associate of a director must not obtain financial accommodation given in contravention of subsection (1).

Maximum penalty: $24 000 or imprisonment for 2 years, or both.

(4) For the purposes of this section, a concessional rate of interest for a borrower from a co-operative is a normal term only if the borrower is entitled to the concession by being a member of a class of borrowers from the co-operative specified in its rules as being entitled to the concession.

(5) If a director of a co-operative or an associate of a director accepts, in payment of a debt owed by a member of the co-operative to the director or associate, any proceeds of financial accommodation provided to the member by the co‑operative, this section has effect as if the financial accommodation has been provided to the director or associate.

(a) the provision of financial accommodation to a director or an associate of a director; or

(b) the obtaining of financial accommodation by a director or an associate of a director; or

includes a reference to a provision of financial accommodation to, or an obtaining of financial accommodation by, the director or associate, or a debt owed to the director or associate, jointly with another person.

associate of a director means:

(b) a person when acting in the capacity of trustee of a trust under which:

(i) the director or director's spouse or de facto partner has a beneficial interest; or

(ii) a corporation referred to in paragraph (c) has a beneficial interest; or

(i) the director or director's spouse or de facto partner has a material interest in shares in the corporation; and

(ii) the nominal value of the shares is not less than 10% of the nominal value of the issued share capital of the corporation.

(8) For the purposes of this section, a person has a material interest in a share in a corporation if:

(a) the person has power to withdraw the share capital subscribed for the share or to exercise control over the withdrawal of the share capital; or

(b) the person has power to dispose of the share or to exercise control over the disposal of the share; or

(c) the person has power to exercise or to control the exercise of any right to vote conferred on the holder of the share.