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Formal Consolidation |  2006 RevEd
Disqualification of unfit directors of insolvent companies
149.—(1)  The Court may —
(a)on the application of the Minister or the Official Receiver as provided for in subsection (9)(a); and
(b)on being satisfied as to the matters referred to in subsection (2),
make an order disqualifying a person specified in the order from being a director or in any way, whether directly or indirectly, being concerned in, or take part in, the management of a company during such period not exceeding 5 years after the date of the order as is specified in the order (referred to in this section as a disqualification order).
[13/87]
(2)  The Court shall make a disqualification order under subsection (1) if it is satisfied that —
(a)the person against whom the order is sought has been given not less than 14 days’ notice of the application; and
(b)the person —
(i)is or has been a director of a company which has at any time gone into liquidation (whether while he was a director or within 3 years of his ceasing to be a director) and was insolvent at that time; and
(ii)that his conduct as director of that company either taken alone or taken together with his conduct as a director of any other company or companies makes him unfit to be a director of or in any way, whether directly or indirectly, be concerned in, or take part in, the management of a company.
(3)  If in the case of a person who is or has been a director of a company which is —
(a)being wound up by the Court, it appears to the Official Receiver or to the liquidator (if he is not the Official Receiver); or
(b)being wound up otherwise than as mentioned in paragraph (a), it appears to the liquidator,
that the conditions mentioned in subsection (2)(b) are satisfied as respects that person, the Official Receiver or the liquidator, as the case may be, shall immediately report the matter to the Minister.
(4)  The Minister may require the Official Receiver or the liquidator or the former liquidator of a company —
(a)to furnish him with such information with respect to any person’s conduct as a director of the company; and
(b)to produce and permit inspection of such books, papers and other records relevant to that person’s conduct as such a director,
as the Minister may reasonably require for the purpose of determining whether to exercise, or of exercising, any of his functions under this section; and if default is made in complying with that requirement the Court may, on the application of the Minister, make an order requiring that person to make good the default within such time as is specified in the order.
(5)  For the purposes of this section —
(a)a company has gone into liquidation —
(i)if it is wound up by the Court, on the date of the filing of the winding up application;
(ii)where a provisional liquidator was appointed under section 291(1), at the time when the declaration made under that subsection was lodged with the Registrar; and
(iii)in any other case, on the date of the passing of the resolution for the voluntary winding up; and
(b)a company was insolvent at the time it has gone into liquidation if it was unable to pay its debts, within the meaning of that expression in section 254(2),
and references in this section to a person’s conduct as a director of any company or companies include, where any of those companies have become insolvent, references to that person’s conduct in relation to any matter connected with or arising out of the insolvency of that company.
[42/2005]
(6)  In deciding whether a person’s conduct as a director of any particular company or companies make him unfit to be concerned in, or take part in, the management of a company as is mentioned in subsection (2)(b), the Court shall in relation to his conduct as a director of that company or, as the case may be, each of those companies have regard, generally to the matters referred to in paragraph (a), and, in particular, to the matters referred to in paragraph (b), notwithstanding that the director has not been convicted or may be criminally liable in respect of any of these matters —
(a)
(i)as to whether there has been any misfeasance or breach of any fiduciary or other duty by the director in relation to the company;
(ii)as to whether there has been any misapplication or retention by the director of, or any conduct by the director giving rise to an obligation to account for, any money or other property of the company;
(iii)as to the extent of the director’s responsibility for any failure by the company to comply with sections 138, 190, 191, 197, 199 and 201; and
(b)
(i)as to the extent of the director’s responsibility for the causes of the company becoming insolvent;
(ii)as to the extent of the director’s responsibility for any failure by the company to supply any goods or services which have been paid for (in whole or in part);
(iii)as to the extent of the director’s responsibility for the company entering into any transaction liable to be set aside under section 259;
(iv)as to whether the causes of the company becoming insolvent are attributable to its carrying on business in a particular industry where the risk of insolvency is generally recognised to be higher.
(7)  The Minister may, by notification in the Gazette, add to, vary or amend the matters referred to in subsection (6) and that notification may contain such transitional provisions as may appear to the Minister to be necessary or expedient.
(8)  In this section, “company” includes a corporation and a foreign company but does not include a partnership or association to which Division 5 of Part X applies.
[8/2003]
(9)  (a)  In the case of a person who is or has been a director of a company which has gone into liquidation and is being wound up by the Court, an application under this section shall be made by the Official Receiver but in any other case an application shall be made by the Minister.
(b)On a hearing of an application under this section —
(i)the Minister or the Official Receiver, as the case may be, shall appear and call the attention of the Court to any matter which appears to him to be relevant (and for this purpose the Minister may be represented) and may give evidence or call witnesses; and
(ii)the person against whom an order is sought may appear and himself give evidence or call witnesses.
(10)  This section shall not apply unless the company mentioned in subsection (2)(b) has gone into insolvent liquidation on or after 15th August 1984 and the conduct to which the Court shall have regard shall not include conduct as a director of a company that has gone into liquidation before that date.
(11)  A person who acts as judicial manager, receiver or receiver manager shall not be liable to have a disqualification order made against him in respect of acts done in his capacity as judicial manager, receiver or receiver manager, as the case may be.
[40/89]
(12)  Any person who acts in contravention of a disqualification order made under this section shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $10,000 or to imprisonment for a term not exceeding 2 years or to both.
(13)  Nothing in this section shall prevent a person who is disqualified pursuant to an order made under subsection (1) from applying for leave of the Court to be concerned in or take part in the management of a company.
[40/89]
(14)  On the hearing of an application made under subsection (13) or (15), the Minister or the Official Receiver shall appear (and for this purpose the Minister may be represented) and call attention of the Court to any matter which appears to him to be relevant to the application and may himself give evidence or call witnesses.
[40/89]
(15)  Any right to apply for leave of the Court to be concerned or take part in the management of a company that was subsisting immediately before 23rd March 1990 shall, after that date, be treated as subsisting by virtue of the corresponding provision made under this section.
[40/89]
Informal Consolidation | Amended Act 36 of 2014
Disqualification of unfit directors of insolvent companies
149.—(1)  The Court may —
(a)on the application of the Minister or the Official Receiver as provided for in subsection (9)(a); and
(b)on being satisfied as to the matters referred to in subsection (2),
make an order disqualifying a person specified in the order from being a director or in any way, whether directly or indirectly, being concerned in, or take part in, the management of a company during such period not exceeding 5 years after the date of the order as is specified in the order (referred to in this section as a disqualification order).
[13/87]
(2)  The Court shall make a disqualification order under subsection (1) if it is satisfied that —
(a)the person against whom the order is sought has been given not less than 14 days’ notice of the application; and
(b)the person —
(i)is or has been a director of a company which has at any time gone into liquidation (whether while he was a director or within 3 years of his ceasing to be a director) and was insolvent at that time; and
(ii)that his conduct as director of that company either taken alone or taken together with his conduct as a director of any other company or companies makes him unfit to be a director of or in any way, whether directly or indirectly, be concerned in, or take part in, the management of a company.
(3)  If in the case of a person who is or has been a director of a company which is —
(a)being wound up by the Court, it appears to the Official Receiver or to the liquidator (if he is not the Official Receiver); or
(b)being wound up otherwise than as mentioned in paragraph (a), it appears to the liquidator,
that the conditions mentioned in subsection (2)(b) are satisfied as respects that person, the Official Receiver or the liquidator, as the case may be, shall immediately report the matter to the Minister.
(4)  The Minister may require the Official Receiver or the liquidator or the former liquidator of a company —
(a)to furnish him with such information with respect to any person’s conduct as a director of the company; and
(b)to produce and permit inspection of such books, papers and other records relevant to that person’s conduct as such a director,
as the Minister may reasonably require for the purpose of determining whether to exercise, or of exercising, any of his functions under this section; and if default is made in complying with that requirement the Court may, on the application of the Minister, make an order requiring that person to make good the default within such time as is specified in the order.
(5)  For the purposes of this section —
(a)a company has gone into liquidation —
(i)if it is wound up by the Court, on the date of the filing of the winding up application;
(ii)where a provisional liquidator was appointed under section 291(1), at the time when the declaration made under that subsection was lodged with the Registrar; and
(iii)in any other case, on the date of the passing of the resolution for the voluntary winding up; and
(b)a company was insolvent at the time it has gone into liquidation if it was unable to pay its debts, within the meaning of that expression in section 254(2),
and references in this section to a person’s conduct as a director of any company or companies include, where any of those companies have become insolvent, references to that person’s conduct in relation to any matter connected with or arising out of the insolvency of that company.
[42/2005]
(6)  In deciding whether a person’s conduct as a director of any particular company or companies make him unfit to be concerned in, or take part in, the management of a company as is mentioned in subsection (2)(b), the Court shall in relation to his conduct as a director of that company or, as the case may be, each of those companies have regard, generally to the matters referred to in paragraph (a), and, in particular, to the matters referred to in paragraph (b), notwithstanding that the director has not been convicted or may be criminally liable in respect of any of these matters —
(a)
(i)as to whether there has been any misfeasance or breach of any fiduciary or other duty by the director in relation to the company;
(ii)as to whether there has been any misapplication or retention by the director of, or any conduct by the director giving rise to an obligation to account for, any money or other property of the company;
(iii)as to the extent of the director’s responsibility for any failure by the company to comply with sections 138, 190, 191, 196B, 197, 199 and 201; and
[Act 36 of 2014 wef 03/01/2016]
(b)
(i)as to the extent of the director’s responsibility for the causes of the company becoming insolvent;
(ii)as to the extent of the director’s responsibility for any failure by the company to supply any goods or services which have been paid for (in whole or in part);
(iii)as to the extent of the director’s responsibility for the company entering into any transaction liable to be set aside under section 259;
(iv)as to whether the causes of the company becoming insolvent are attributable to its carrying on business in a particular industry where the risk of insolvency is generally recognised to be higher.
(7)  The Minister may, by notification in the Gazette, add to, vary or amend the matters referred to in subsection (6) and that notification may contain such transitional provisions as may appear to the Minister to be necessary or expedient.
(8)  In this section, “company” includes a corporation and a foreign company but does not include a partnership or association to which Division 5 of Part X applies.
[8/2003]
(9)  (a)  In the case of a person who is or has been a director of a company which has gone into liquidation and is being wound up by the Court, an application under this section shall be made by the Official Receiver but in any other case an application shall be made by the Minister.
(b)  On a hearing of an application under this section —
(i)the Minister or the Official Receiver, as the case may be, shall appear and call the attention of the Court to any matter which appears to him to be relevant (and for this purpose the Minister may be represented) and may give evidence or call witnesses; and
(ii)the person against whom an order is sought may appear and himself give evidence or call witnesses.
(10)  This section shall not apply unless the company mentioned in subsection (2)(b) has gone into insolvent liquidation on or after 15th August 1984 and the conduct to which the Court shall have regard shall not include conduct as a director of a company that has gone into liquidation before that date.
(11)  A person who acts as judicial manager, receiver or receiver manager shall not be liable to have a disqualification order made against him in respect of acts done in his capacity as judicial manager, receiver or receiver manager, as the case may be.
[40/89]
(12)  Any person who acts in contravention of a disqualification order made under this section shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $10,000 or to imprisonment for a term not exceeding 2 years or to both.
(13)  Nothing in this section shall prevent a person who is disqualified pursuant to an order made under subsection (1) from applying for leave of the Court to be concerned in or take part in the management of a company.
[40/89]
(14)  On the hearing of an application made under subsection (13) or (15), the Minister or the Official Receiver shall appear (and for this purpose the Minister may be represented) and call attention of the Court to any matter which appears to him to be relevant to the application and may himself give evidence or call witnesses.
[40/89]
(15)  Any right to apply for leave of the Court to be concerned or take part in the management of a company that was subsisting immediately before 23rd March 1990 shall, after that date, be treated as subsisting by virtue of the corresponding provision made under this section.
[40/89]
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Last updated 11 May 2024
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