Compulsory restructuring of share capital
69.—(1)  The Authority may make a determination that the share capital of a pertinent financial institution incorporated in Singapore shall be reduced by the cancellation of the whole or any part of any share capital not paid up, or of any paid-up share capital, if —
(a)any ground exists for the Authority to exercise any power under the relevant provisions in relation to the pertinent financial institution, whether or not the Authority has exercised the power; and
(b)the Authority is of the opinion that —
(i)the liability on any of the shares of the pertinent financial institution in respect of share capital not paid up ought to be extinguished or reduced; or
(ii)any paid-up share capital of the pertinent financial institution is lost or not represented by the available assets of the pertinent financial institution.
(2)  The Authority may make a determination that shares shall be issued by a pertinent financial institution incorporated in Singapore to a subscriber, if —
(a)any ground exists for the Authority to exercise any power under the relevant provisions in relation to the pertinent financial institution, whether or not the Authority has exercised the power;
(b)the subscriber or, where the subscriber is a corporation or co-operative society, the board of directors of the subscriber (in any case where the subscriber is a corporation), or the committee of management of the subscriber (in any case where the subscriber is a co-operative society), has consented to subscribe for the shares; and
(c)the Authority is satisfied that the issue of shares is appropriate, having regard to —
(i)in any case where the pertinent financial institution is a bank licensed under the Banking Act (Cap. 19) —
(A)the interests of the depositors of the pertinent financial institution given priority and the order of priority of each class of depositors under section 62 of the Banking Act;
(B)if the subscriber is a bank licensed under the Banking Act, the interests of the depositors of the subscriber given priority and the order of priority of each class of depositors under section 62 of the Banking Act;
(C)the stability of the financial system in Singapore; and
(D)any other matter that the Authority considers relevant;
(ii)in any case where the pertinent financial institution is a finance company licensed under the Finance Companies Act (Cap. 108) —
(A)the interests of the depositors of the pertinent financial institution given priority and the order of priority of each class of depositors under section 44A of the Finance Companies Act;
(B)if the subscriber is a finance company licensed under the Finance Companies Act, the interests of the depositors of the subscriber given priority and the order of priority of each class of depositors under section 44A of the Finance Companies Act;
(C)the stability of the financial system in Singapore; and
(D)any other matter that the Authority considers relevant;
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(iia)in any case where the pertinent financial institution is an insurer licensed under the Insurance Act (Cap. 142) —
(A)the interests of the policy owners of the insurer given priority and the order of priority of each class of policy owners under section 49FR of the Insurance Act;
(B)if the subscriber is an insurer licensed under the Insurance Act, the interests of the policy owners of the subscriber given priority and the order of priority of each class of policy owners under section 49FR of the Insurance Act;
(C)the stability of the financial system in Singapore; and
(D)any other matter that the Authority considers relevant; or
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(iii)in any other case —
(A)the interests of the affected persons of the pertinent financial institution;
(B)the interests of the affected persons, if any, of the subscriber;
(C)the stability of the financial system in Singapore; and
(D)any other matter that the Authority considers relevant.
(3)  The Authority may, before making a determination, appoint one or more persons —
(a)to perform an independent assessment of —
(i)in the case of a determination to be made under subsection (1), the value of the assets of the pertinent financial institution and the extent to which the whole or any part of any share capital not paid up, or of any paid-up share capital, should be cancelled; and
(ii)in the case of a determination to be made under subsection (2), the value of the assets of the pertinent financial institution in which the shares are proposed to be issued and the consideration, if any, that should be paid by the subscriber; and
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(b)to furnish to the Authority a report on the assessment and on the proposed restructuring of share capital.
(4)  The remuneration and expenses of any person appointed under subsection (3) shall be paid by the pertinent financial institution in which the shares are proposed to be cancelled or issued, as the case may be.
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(5)  The Authority shall serve a copy of any report furnished under subsection (3) on —
(a)the pertinent financial institution in which the shares are proposed to be cancelled or issued, as the case may be; and
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(b)where the report is in relation to a determination to be made under subsection (2), on the subscriber.
(6)  Upon making a determination, the Authority shall submit the determination to the Minister for his approval.
(7)  Before approving the determination, the Minister shall, unless he decides that it is not practicable or desirable to do so —
(a)publish in the Gazette and in such newspaper or newspapers as he may determine a notice of his intention to approve the determination, specifying such particulars as he considers appropriate and the date by which any shareholder of the pertinent financial institution in which the shares are proposed to be cancelled or issued, as the case may be, may make written representations to him; and
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(b)cause to be given to the pertinent financial institution notice in writing of his intention to approve the determination, specifying such particulars as he considers appropriate and the date by which the pertinent financial institution may make written representations to him.
(8)  In determining the period within which written representations have to be made under subsection (7), the Minister shall take into account the need for the restructuring of share capital to be effected expeditiously in the interest of the stability of the financial system in Singapore.
(9)  Upon receipt of any written representation, the Minister shall consider the representation for the purpose of deciding whether to approve the determination.
(10)  Where a determination under subsection (2), if approved, will result in the subscriber becoming a significant shareholder, the Minister shall not approve the determination unless —
(a)the Authority is satisfied that —
(i)the subscriber is a fit and proper person; and
(ii)having regard to the likely influence of the subscriber, the pertinent financial institution will or will continue to conduct its business prudently and comply with the provisions of this Act and the relevant Act applicable to the pertinent financial institution; and
(b)the Minister is satisfied that —
(i)in any case where the pertinent financial institution is a bank incorporated in Singapore, it is in the national interest to do so; or
(ii)in any other case, it is in the public interest to do so.
(11)  The Minister may —
(a)approve the determination without modification;
(b)in the case of a determination under subsection (1), approve the determination subject to any modification he considers appropriate;
(c)in the case of a determination under subsection (2), approve the determination subject to any modification he considers appropriate, if the subscriber or, where the subscriber is a corporation or co-operative society, the board of directors of the subscriber (in any case where the subscriber is a corporation), or the committee of management of the subscriber (in any case where the subscriber is a co-operative society), has agreed to the modification; or
(d)refuse to approve the determination.
(12)  Any approval under subsection (11) shall be subject to such conditions as the Minister may determine, and the Minister may add to, vary or revoke any such condition.
(13)  The pertinent financial institution shall comply with every condition referred to in subsection (12) that applies to it and of which it has been given written notice by the Authority.
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(14)  The subscriber shall comply with every condition referred to in subsection (12) that applies to the subscriber and of which the subscriber has been given written notice by the Authority.
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(14A)  A person that contravenes subsection (13) or (14) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $250,000 and, in the case of a continuing offence, to a further fine not exceeding $25,000 for every day or part of a day during which the offence continues after conviction.
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(15)  A determination, an approval under subsection (11) of a determination or the issue of a certificate shall not preclude the exercise of any power by the Authority or the Minister under this Act or the relevant Act applicable to the pertinent financial institution.
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