73A. Effect of redenomination

Question 1

73A. Effect of redenomination

Answer 1

General overview
[73A.01] Section 73A clarifies that a redenomination of shares in another currency does not amount to the issue of new shares in a different currency. As such, all existing rights, obligations, restrictions affecting the members remain unchanged, as does any entitlement to dividends, voting rights and liability on the amounts remaining unpaid on the shares: s 73A(1) and (2).

Question 2

Existing rights, obligations, etc.

Answer 2

[73A.02] As s 73 is a new section, it has not been tested in the courts. A legal nicety may arise where a member applies to court to ascertain the effect of a redenomination on the dividends or liability to pay the amounts remaining unpaid on the shares, in the sense that fluctuations in the foreign exchange rates would affect the value of the dividends received by the member, or liability to pay the amounts remaining unpaid on the shares. It is, therefore, prudent to state as part of the terms of the redenomination that henceforth, the dividends received or liability to pay the amounts unpaid on the shares shall be designated in the foreign currency, despite any fluctuations in the foreign exchange rate.