76.—(1) Except as otherwise expressly provided by this Act, a public company or a company whose holding company or ultimate holding company is a public company must not, whether directly or indirectly, give any financial assistance for the purpose of, or in connection with —| (a) | the acquisition by any person, whether before or at the same time as the giving of financial assistance, of —| (i) | shares or units of shares in the company; or | | (ii) | shares or units of shares in a holding company or ultimate holding company (as the case may be) of the company; or |
| | (b) | the proposed acquisition by any person of —| (i) | shares or units of shares in the company; or | | (ii) | shares or units of shares in a holding company or ultimate holding company (as the case may be) of the company. [36/2014] |
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(1A) Except as otherwise expressly provided by this Act, a company must not —| (a) | whether directly or indirectly, in any way —| (i) | acquire shares or units of shares in the company; or | | (ii) | purport to acquire shares or units of shares in a holding company or ultimate holding company, as the case may be, of the company; or |
| | (b) | whether directly or indirectly, in any way, lend money on the security of —| (i) | shares or units of shares in the company; or | | (ii) | shares or units of shares in a holding company or ultimate holding company, as the case may be, of the company. [36/2014] |
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| (2) A reference in this section to the giving of financial assistance includes a reference to the giving of financial assistance by means of the making of a loan, the giving of a guarantee, the provision of security, the release of an obligation or the release of a debt or otherwise. |
(3) For the purposes of this section, a company is taken to have given financial assistance for the purpose of an acquisition or proposed acquisition referred to in subsection (1) (called in this subsection the relevant purpose) if —| (a) | the company gave the financial assistance for purposes that included the relevant purpose; and | | (b) | the relevant purpose was a substantial purpose of the giving of the financial assistance. [36/2014] |
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(4) For the purposes of this section, a company is taken to have given financial assistance in connection with an acquisition or proposed acquisition referred to in subsection (1) if, when the financial assistance was given to a person, the company was aware that the financial assistance would financially assist —| (a) | the acquisition by a person of shares or units of shares in the company; or | | (b) | where shares in the company had already been acquired — the payment by a person of any unpaid amount of the subscription payable for the shares, or the payment of any calls on the shares. [36/2014] |
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| (5) If a company contravenes subsection (1) or (1A), the company shall not be guilty of an offence, despite section 407, but each officer of the company who is in default shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $20,000 or to imprisonment for a term not exceeding 3 years or to both. [36/2014] |
| (6) Where a person is convicted of an offence under subsection (5) and the Court by which the person is convicted is satisfied that the company or another person has suffered loss or damage as a result of the contravention that constituted the offence, that Court may, in addition to imposing a penalty under that subsection, order the convicted person to pay compensation to the company or other person (as the case may be) of such amount as the Court specifies, and any such order may be enforced as if it were a judgment of the Court. |
| (7) The power of a Court under section 391 to relieve a person to whom that section applies, wholly or partly and on such terms as the Court thinks fit, from a liability referred to in that section extends to relieving a person against whom an order may be made under subsection (6) from the liability to have such an order made against the person. |
(8) Nothing in subsection (1) or (1A) prohibits —| (a) | a distribution of a company’s assets by way of dividends lawfully made; | | (aa) | a distribution in the course of a company’s winding up; | | (b) | a payment made by a company pursuant to a reduction of capital in accordance with Division 3A of this Part; | | (c) | the discharge by a company of a liability of the company that was incurred in good faith as a result of a transaction entered into on ordinary commercial terms; | | (d) | anything done pursuant to an order of Court made under section 210; | | (e) | anything done under an arrangement made pursuant to section 178 of the Insolvency, Restructuring and Dissolution Act 2018; | | (f) | anything done under an arrangement made between a company and its creditors which is binding on the creditors by virtue of section 187 of the Insolvency, Restructuring and Dissolution Act 2018; | | (g) | where a corporation is a borrowing corporation by reason that it is or will be under a liability to repay moneys received or to be received by it —| (i) | the giving, in good faith and in the ordinary course of commercial dealing, by a company that is a subsidiary of the borrowing corporation, of a guarantee in relation to the repayment of those moneys, whether or not the guarantee is secured by any charge over the property of that company; or | | (ii) | the provision, in good faith and in the ordinary course of commercial dealing, by a company that is a subsidiary of the borrowing corporation, of security in relation to the repayment of those moneys; |
| | (ga) | the giving by a company in good faith and in the ordinary course of commercial dealing of any representation, warranty or indemnity in relation to an offer to the public of, or an invitation to the public to subscribe for or purchase, shares or units of shares in that company; | | (h) | the purchase by a company of shares in the company pursuant to an order of a Court; | | (i) | the creation or acquisition, in good faith and in the ordinary course of commercial dealing, by a company of a lien on shares in the company (other than fully‑paid shares) for any amount payable to the company in respect of the shares; | | (j) | the entering into, in good faith and in the ordinary course of commercial dealing, of an agreement by a company with a subscriber for shares in the company permitting the subscriber to make payments for the shares by instalments; | | (k) | an allotment of bonus shares; | | (l) | a redemption of redeemable shares of a company in accordance with the company’s constitution; or | | (m) | the payment of some or all of the costs by a company listed on an approved exchange in Singapore or any securities exchange outside Singapore associated with a scheme, an arrangement or a plan under which any shareholder of the company may purchase or sell shares for the sole purpose of rounding off any odd‑lots which the shareholder owns, |
| but nothing in this subsection — |
| (n) | is to be construed as implying that a particular act of a company would, but for this subsection, be prohibited by subsection (1) or (1A); or | | (o) | is to be construed as limiting the operation of any rule of law permitting the giving of financial assistance by a company, the acquisition of shares or units of shares by a company or the lending of money by a company on the security of shares or units of shares. [36/2014; 4/2017; 40/2018] |
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(8A) For the purposes of subsection (8)(m) —| (a) | an “odd‑lot” means any amount of shares in the company which is less than the amount of shares constituting a board lot; | | (b) | a “board lot” means a standard unit of trading of the securities exchange on which the company is listed; and | | (c) | the reference to “rounding off any odd‑lots” includes an act by a shareholder, who owns only odd‑lots in a company, disposing all such odd‑lots. [36/2014] |
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(9) Nothing in subsection (1) or (1A) prohibits —| (a) | the making of a loan, or the giving of a guarantee or the provision of security in connection with one or more loans made by one or more other persons, by a company in the ordinary course of its business where the activities of that company are regulated by any written law relating to banking, finance companies or insurance or are subject to supervision by the Monetary Authority of Singapore and where —| (i) | the lending of money, or the giving of guarantees or the provision of security in connection with loans made by other persons, is done in the course of such activities; and | | (ii) | the loan that is made by the company, or, where the guarantee is given or the security is provided in respect of a loan, that loan is made on ordinary commercial terms as to the rate of interest, the terms of repayment of principal and payment of interest, the security to be provided and otherwise; |
| | (b) | the giving by a company of financial assistance for the purpose of, or in connection with, the acquisition or proposed acquisition of shares or units of shares in the company or in a holding company or ultimate holding company (as the case may be) of the company to be held by or for the benefit of employees of the company or of a corporation that is related to the company, including any director holding a salaried employment or office in the company or in the corporation; or | | (c) | the purchase or acquisition or proposed purchase or acquisition by a company of its own shares in accordance with sections 76B to 76G. [36/2014] |
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(9A) Nothing in subsection (1) prohibits the giving by a company of financial assistance for the purpose of, or in connection with, an acquisition or proposed acquisition by a person of shares or units of shares in the company or in a holding company or ultimate holding company (as the case may be) of the company if —| (a) | the amount of the financial assistance, together with any other financial assistance given by the company under this subsection repayment of which remains outstanding, would not exceed 10% of the aggregate of —| (i) | the total paid‑up capital of the company; and | | (ii) | the reserves of the company, |
| as disclosed in the most recent financial statements of the company that comply with section 201; |
| | (b) | the company receives fair value in connection with the financial assistance; | | (c) | the board of directors of the company passes a resolution that —| (i) | the company should give the assistance; | | (ii) | giving the assistance is in the best interests of the company; and | | (iii) | the terms and conditions under which the assistance is given are fair and reasonable to the company; |
| | (d) | the resolution sets out in full the grounds for the directors’ conclusions; | | (e) | all the directors of the company make a solvency statement in relation to the giving of the financial assistance; | | (f) | within 10 business days of providing the financial assistance, the company sends to each member a notice containing particulars of —| (i) | the class and number of shares or units of shares in respect of which the financial assistance was or is to be given; | | (ii) | the consideration paid or payable for those shares or units of shares; | | (iii) | the identity of the person receiving the financial assistance and, if that person is not the beneficial owner of those shares or units of shares, the identity of the beneficial owner; and | | (iv) | the nature and, if quantifiable, the amount of the financial assistance; and |
| | (g) | not later than the business day next following the day when the notice mentioned in paragraph (f) is sent to members of the company, the company lodges with the Registrar a copy of that notice and a copy of the solvency statement mentioned in paragraph (e). [36/2014] |
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(9B) Nothing in subsection (1) prohibits the giving by a company of financial assistance for the purpose of, or in connection with, an acquisition or proposed acquisition by a person of shares or units of shares in the company or in a holding company or ultimate holding company (as the case may be) of the company if —| (a) | the board of directors of the company passes a resolution that —| (i) | the company should give the assistance; | | (ii) | giving the assistance is in the best interests of the company; and | | (iii) | the terms and conditions under which the assistance is given are fair and reasonable to the company; |
| | (b) | the resolution sets out in full the grounds for the directors’ conclusions; | | (c) | all the directors of the company make a solvency statement in relation to the giving of the financial assistance; | | (d) | not later than the business day next following the day when the resolution mentioned in paragraph (a) is passed, the company sends to each member having the right to vote on the resolution mentioned in paragraph (e) a notice containing particulars of —| (i) | the directors’ resolution mentioned in paragraph (a); | | (ii) | the class and number of shares or units of shares in respect of which the financial assistance is to be given; | | (iii) | the consideration payable for those shares or units of shares; | | (iv) | the identity of the person receiving the financial assistance and, if that person is not the beneficial owner of those shares or units of shares, the identity of the beneficial owner; | | (v) | the nature and, if quantifiable, the amount of the financial assistance; and | | (vi) | such further information and explanation as may be necessary to enable a reasonable member to understand the nature and implications for the company and its members of the proposed transaction; |
| | (e) | a resolution is passed —| (i) | by all the members of the company present and voting either in person or by proxy at the relevant meeting; or | | (ii) | if the resolution is proposed to be passed by written means under section 184A, by all the members of the company, |
| | (f) | not later than the business day next following the day when the resolution mentioned in paragraph (e) is passed, the company lodges with the Registrar a copy of that resolution and a copy of the solvency statement mentioned in paragraph (c); and | | (g) | the financial assistance is given not more than 12 months after the resolution mentioned in paragraph (e) is passed. [36/2014] |
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(9BA) Nothing in subsection (1) prohibits the giving by a company of financial assistance for the purpose of, or in connection with, an acquisition or proposed acquisition by a person of shares or units of shares in the company or in a holding company or ultimate holding company (as the case may be) of the company if —| (a) | giving the assistance does not materially prejudice —| (i) | the interests of the company or its shareholders; or | | (ii) | the company’s ability to pay its creditors; |
| | (b) | the board of directors of the company passes a resolution that —| (i) | the company should give the assistance; and | | (ii) | the terms and conditions under which the assistance is proposed to be given are fair and reasonable to the company; |
| | (c) | the resolution sets out in full the grounds for the directors’ conclusions; and | | (d) | the company lodges with the Registrar a copy of the resolution mentioned in paragraph (b). [36/2014] |
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(9C) A company must not give financial assistance under subsection (9A) or (9B) if, before the assistance is given —| (a) | any of the directors who voted in favour of the resolution under subsection (9A)(c) or (9B)(a), respectively —| (i) | ceases to be satisfied that the giving of the assistance is in the best interests of the company; or | | (ii) | ceases to be satisfied that the terms and conditions under which the assistance is proposed are fair and reasonable to the company; or |
| | (b) | any of the directors no longer has reasonable grounds for any of the opinions expressed in the solvency statement. |
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| (9CA) A company must not give financial assistance under subsection (9BA) if, before the assistance is given, any of the directors who voted in favour of the resolution under subsection (9BA)(b) ceases to be satisfied that the terms and conditions under which the assistance is proposed are fair and reasonable to the company. [36/2014] |
(9D) A director of a company is not relieved of any duty to the company under section 157 or otherwise, and whether of a fiduciary nature or not, in connection with the giving of financial assistance by the company for the purpose of, or in connection with, an acquisition or proposed acquisition of shares or units of shares in the company or in a holding company or ultimate holding company (as the case may be) of the company, by —| (a) | the passing of a resolution by the board of directors of the company under subsection (9A) or (9BA) for the giving of the financial assistance; or | | (b) | the passing of a resolution by the board of directors of the company, and the passing of a resolution by the members of the company, under subsection (9B) for the giving of the financial assistance. [36/2014] |
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(10) Nothing in subsection (1) prohibits the giving by a company of financial assistance for the purpose of, or in connection with, an acquisition or proposed acquisition by a person of shares or units of shares in the company or in a holding company or ultimate holding company (as the case may be) of the company if —| (a) | the company, by special resolution, resolves to give financial assistance for the purpose of or in connection with, that acquisition; | | (b) | where —| (i) | the company is a subsidiary of a listed corporation; or | | (ii) | the company is not a subsidiary of a listed corporation but is a subsidiary whose ultimate holding company is incorporated in Singapore, |
| the listed corporation or the ultimate holding company (as the case may be) has, by special resolution, approved the giving of the financial assistance; |
| | (c) | the notice specifying the intention to propose the resolution referred to in paragraph (a) as a special resolution sets out —| (i) | particulars of the financial assistance proposed to be given and the reasons for the proposal to give that assistance; and | | (ii) | the effect that the giving of the financial assistance would have on the financial position of the company and, where the company is included in a group of corporations consisting of a holding company and a subsidiary or subsidiaries, the effect that the giving of the financial assistance would have on the financial position of the group of corporations, |
| and is accompanied by a copy of a statement made in accordance with a resolution of the directors, setting out the names of any directors who voted against the resolution and the reasons why they so voted, and signed by not less than 2 directors, stating whether, in the opinion of the directors who voted in favour of the resolution, after taking into account the financial position of the company (including future liabilities and contingent liabilities of the company), the giving of the financial assistance would be likely to prejudice materially the interests of the creditors or members of the company or any class of those creditors or members; |
| | (d) | the notice specifying the intention to propose the resolution referred to in paragraph (b) as a special resolution is accompanied by a copy of the notice, and a copy of the statement, mentioned in paragraph (c); | | (e) | not later than the day next following the day when the notice mentioned in paragraph (c) is despatched to members of the company there is lodged with the Registrar a copy of that notice and a copy of the statement that accompanied that notice; | | (f) | the notice mentioned in paragraph (c) and a copy of the statement mentioned in that paragraph are sent to —| (i) | all members of the company; | | (ii) | all trustees for debenture holders of the company; and | | (iii) | if there are no trustees for, or for a particular class of, debenture holders of the company — all debenture holders, or all debenture holders of that class (as the case may be) of the company whose names are, at the time when the notice is despatched, known to the company; |
| | (g) | the notice mentioned in paragraph (d) and the accompanying documents are sent to —| (i) | all members of the listed corporation or of the ultimate holding company; | | (ii) | all trustees for debenture holders of the listed corporation or of the ultimate holding company; and | | (iii) | if there are no trustees for, or for a particular class of, debenture holders of the listed corporation or of the ultimate holding company — all debenture holders or debenture holders of that class (as the case may be) of the listed corporation or of the ultimate holding company whose names are, at the time when the notice is despatched, known to the listed corporation or the ultimate holding company; |
| | (h) | within 21 days after the date on which the resolution mentioned in paragraph (a) is passed or, in a case to which paragraph (b) applies, the date on which the resolution referred to in that paragraph is passed, whichever is the later, a notice —| (i) | setting out the terms of the resolution mentioned in paragraph (a); and | | (ii) | stating that any of the persons referred to in subsection (12) may, within the period mentioned in that subsection, make an application to the Court opposing the giving of the financial assistance, |
| is published in a daily newspaper circulating generally in Singapore; |
| | (i) | no application opposing the giving of the financial assistance is made within the period mentioned in subsection (12) or, if such an application or applications has or have been made, the application or each of the applications has been withdrawn or the Court has approved the giving of the financial assistance; and | | (j) | the financial assistance is given in accordance with the terms of the resolution mentioned in paragraph (a) and not earlier than —| (i) | in a case to which sub‑paragraph (ii) does not apply — the expiration of the period mentioned in subsection (12); or | | (ii) | if an application or applications has or have been made to the Court within that period —| (A) | where the application or each of the applications has been withdrawn — the withdrawal of the application or of the last of the applications to be withdrawn; or | | (B) | in any other case — the decision of the Court on the application or applications. [36/2014] |
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(10A) If the resolution mentioned in subsection (10)(a) or (b) is proposed to be passed by written means under section 184A, subsection (10)(f) or (g) (as the case may be) must be complied with at or before the time —| (a) | agreement to the resolution is sought in accordance with section 184C; or | | (b) | documents referred to in section 183(3A) in respect of the resolution are served on or made accessible to members of the company in accordance with section 183(3A), |
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| (11) Where, on application to the Court by a company, the Court is satisfied that the provisions of subsection (10) have been substantially complied with in relation to a proposed giving by the company of financial assistance of a kind mentioned in that subsection, the Court may, by order, declare that the provisions of that subsection have been complied with in relation to the proposed giving by the company of financial assistance. |
(12) Where a special resolution mentioned in subsection (10)(a) is passed by a company, an application to the Court opposing the giving of the financial assistance to which the special resolution relates may be made, within the period of 21 days after the publication of the notice mentioned in subsection (10)(h) —| (a) | by a member of the company; | | (b) | by a trustee for debenture holders of the company; | | (c) | by a debenture holder of the company; | | (d) | by a creditor of the company; | | (e) | if subsection (10)(b) applies by —| (i) | a member of the listed corporation or ultimate holding company that passed a special resolution mentioned in that subsection; | | (ii) | a trustee for debenture holders of that listed corporation or ultimate holding company; | | (iii) | a debenture holder of that listed corporation or ultimate holding company; or | | (iv) | a creditor of that listed corporation or ultimate holding company; or |
| | (f) | by the Registrar. |
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(13) Where an application or applications opposing the giving of financial assistance by a company in accordance with a special resolution passed by the company is or are made to the Court under subsection (12), the Court —| (a) | must, in determining what order or orders to make in relation to the application or applications, have regard to the rights and interests of the members of the company or of any class of them as well as to the rights and interests of the creditors of the company or of any class of them; and | | (b) | must not make an order approving the giving of the financial assistance unless the Court is satisfied that —| (i) | the company has disclosed to the members of the company all material matters relating to the proposed financial assistance; and | | (ii) | the proposed financial assistance would not, after taking into account the financial position of the company (including any future or contingent liabilities), be likely to prejudice materially the interests of the creditors or members of the company or of any class of those creditors or members, |
| and may do all or any of the following: |
| (iii) | if it thinks fit, make an order for the purchase by the company of the interests of dissentient members of the company and for the reduction accordingly of the capital of the company; | | (iv) | if it thinks fit, adjourn the proceedings in order that an arrangement may be made to the satisfaction of the Court for the purchase (otherwise than by the company or by a subsidiary of the company) of the interests of dissentient members; | | (v) | give such ancillary or consequential directions and make such ancillary or consequential orders as it thinks expedient; | | (vi) | make an order disapproving the giving of the financial assistance or, subject to paragraph (b), an order approving the giving of the financial assistance. |
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| (14) Where the Court makes an order under this section in relation to the giving of financial assistance by a company, the company must, within 14 days after the order is made, lodge with the Registrar a copy of the order. |
| (15) The passing of a special resolution by a company for the giving of financial assistance by the company for the purpose of, or in connection with, an acquisition or proposed acquisition of shares or units of shares in the company, and the approval by the Court of the giving of the financial assistance, do not relieve a director of the company of any duty to the company under section 157 or otherwise, and whether of a fiduciary nature or not, in connection with the giving of the financial assistance. |
| (16) A reference in this section to an acquisition or proposed acquisition of shares or units of shares is a reference to any acquisition or proposed acquisition whether by way of purchase, subscription or otherwise. |
| (17) This section does not apply in relation to the doing of any act or thing pursuant to a contract entered into before 15 May 1987 if the doing of that act or thing would have been lawful if this Act had not been enacted. |
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