Co-operatives National Law (Queensland)

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—

the accommodation is—

approved under subsection (2); or

given under a scheme approved under subsection (2); or

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

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.

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

it is approved by a resolution passed at a general meeting; and

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

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.

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.

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.

In this section, a reference to—

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

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

a debt owed to a director or an associate of a director;

In this section—

the director’s spouse or de facto partner; or

a person when acting in the capacity of trustee of a trust under which—

the director or director’s spouse or de facto partner has a beneficial interest; or

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

a corporation if—

the director or director’s spouse or de facto partner has a material interest in shares in the corporation; and

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

For the purposes of this section, a person has a material interest in a share in a corporation if—

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

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

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