Division 4 — Compulsory restructuring of share capital
of pertinent financial institution
Interpretation of this Division
68.  In this Division, unless the context otherwise requires —
“business” includes affairs, property, right, obligation and liability;
“certificate” means a certificate of restructuring of share capital issued by the Minister under section 70(1);
“determination” means a determination made by the Authority under section 69(1) or (2);
“property” includes property, right and power of every description;
“significant shareholder”, in relation to a pertinent financial institution, means any person prescribed by regulations made under section 126 as a significant shareholder for that pertinent financial institution;
“significant shareholder provisions”, in relation to any pertinent financial institution, means such provisions of written law as may be prescribed by regulations made under section 126 for that pertinent financial institution;
“subscriber” means any person to whom shares in a pertinent financial institution incorporated in Singapore are, are to be, or are proposed to be, issued under this Division.
[9/2013; 31/2017]
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 must 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.
[9/2013; 31/2017]
(2)  The Authority may make a determination that shares must 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 1970 —
(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 1970;
(B)if the subscriber is a bank licensed under the Banking Act 1970, 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 1970;
(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 1967 —
(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 1967;
(B)if the subscriber is a finance company licensed under the Finance Companies Act 1967, 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 1967;
(C)the stability of the financial system in Singapore; and
(D)any other matter that the Authority considers relevant;
(iia)in any case where the pertinent financial institution is an insurer licensed under the Insurance Act 1966 —
(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 123 of the Insurance Act 1966;
(B)if the subscriber is an insurer licensed under the Insurance Act 1966, the interests of the policy owners of the subscriber given priority and the order of priority of each class of policy owners under section 123 of the Insurance Act 1966;
(C)the stability of the financial system in Singapore; and
(D)any other matter that the Authority considers relevant; or
(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.
[9/2013; 31/2017]
(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
(b)to provide to the Authority a report on the assessment and on the proposed restructuring of share capital.
[9/2013; 31/2017]
(4)  The remuneration and expenses of any person appointed under subsection (3) must be paid by the pertinent financial institution in which the shares are proposed to be cancelled or issued, as the case may be.
[9/2013; 31/2017]
(5)  The Authority must serve a copy of any report provided 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
(b)where the report is in relation to a determination to be made under subsection (2), on the subscriber.
[9/2013; 31/2017]
(6)  Upon making a determination, the Authority must submit the determination to the Minister for the Minister’s approval.
[9/2013]
(7)  Before approving the determination, the Minister must, unless he or she decides that it is not practicable or desirable to do so —
(a)publish in the Gazette and in such newspaper or newspapers as the Minister may determine a notice of the Minister’s intention to approve the determination, specifying such particulars as the Minister 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 the Minister; and
(b)cause to be given to the pertinent financial institution written notice of the Minister’s intention to approve the determination, specifying such particulars as the Minister considers appropriate and the date by which the pertinent financial institution may make written representations to the Minister.
[9/2013; 31/2017]
(8)  In determining the period within which written representations have to be made under subsection (7), the Minister must 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.
[9/2013]
(9)  Upon receipt of any written representation, the Minister must consider the representation for the purpose of deciding whether to approve the determination.
[9/2013]
(10)  Where a determination under subsection (2), if approved, will result in the subscriber becoming a significant shareholder, the Minister must 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.
[9/2013]
(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 the Minister considers appropriate;
(c)in the case of a determination under subsection (2), approve the determination subject to any modification the Minister 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.
[9/2013]
(12)  Any approval under subsection (11) is subject to such conditions as the Minister may determine, and the Minister may add to, vary or revoke any such condition.
[9/2013]
(13)  The pertinent financial institution must 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.
[9/2013; 31/2017]
(14)  The subscriber must 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.
[9/2013; 31/2017]
(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.
[31/2017]
(15)  A determination, an approval under subsection (11) of a determination or the issue of a certificate does 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.
[9/2013]
Certificate of restructuring of share capital
70.—(1)  If the Minister approves a determination, he or she must, as soon as practicable, issue a certificate of restructuring of share capital, which comes into effect on the date specified by him or her in the certificate.
[9/2013; 31/2017]
(2)  The certificate must specify such information as may be prescribed by regulations made under section 126.
[9/2013; 31/2017]
(3)  The certificate may make provision for all or any of the following matters:
(a)the cancellation of the whole or any part of the share capital of the pertinent financial institution not paid up;
(b)the cancellation of the whole or any part of the paid‑up share capital of the pertinent financial institution which is lost or not represented by the available assets of the pertinent financial institution;
(c)the shares to be issued by the pertinent financial institution to the subscriber, the consideration (if any) to be paid by the subscriber for the shares and the period within which the consideration is to be paid;
(d)such incidental, consequential and supplementary matters as are, in the Minister’s opinion, necessary to secure that the restructuring of share capital is fully effective, including conditions relating to the restructuring of share capital.
[9/2013]
(4)  The Minister may at any time before the certificate comes into effect add to, vary or revoke any matter specified in the certificate.
[9/2013]
(5)  On or before the date on which the certificate comes into effect, the Authority must cause the certificate and any addition, variation or revocation referred to in subsection (4) to be served on the pertinent financial institution and published in the Gazette and in such newspaper or newspapers as the Minister may determine.
[9/2013]
(6)  Despite any written law or rule of law, or anything in the memorandum and articles of association of the pertinent financial institution, upon the certificate coming into effect —
(a)where the certificate provides for a reduction of the share capital of the pertinent financial institution —
(i)the reduction of the share capital takes effect without other or further act by the pertinent financial institution; and
(ii)the certificate has effect according to its tenor and is binding on any person affected by it; or
(b)where the certificate provides for the issue of shares by the pertinent financial institution —
(i)the pertinent financial institution must issue the shares in accordance with the certificate; and
(ii)the certificate has effect according to its tenor and is binding on any person affected by it.
[9/2013]
(7)  Where the issue of shares under the certificate results in the subscriber becoming a significant shareholder of the pertinent financial institution, upon the coming into effect of the certificate, the subscriber —
(a)is deemed to have obtained the approval of the Minister or the Authority (as the case may be) under the significant shareholder provisions applicable to the pertinent financial institution, in respect of the shares; and
(b)is not required to make a take-over offer or be required to acquire the shares of the other shareholders of the pertinent financial institution, despite the provisions of the Companies Act 1967 or the Take‑over Code.
[9/2013; 31/2017]
(8)  The pertinent financial institution must lodge a copy of the certificate with the Registrar of Companies within 7 days after being served the certificate.
[9/2013]
(9)  A pertinent financial institution which or a subscriber who fails to comply with any provision in the certificate shall be guilty of an offence and shall be liable on conviction —
(a)in the case of an individual, to a fine not exceeding $125,000 or to imprisonment for a term not exceeding 3 years or to both and, in the case of a continuing offence, to a further fine not exceeding $12,500 for every day or part of a day during which the offence continues after conviction; or
(b)in any other case, 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.
[9/2013]
(10)  Where a person is charged with an offence under subsection (9), it is a defence for the person to prove that —
(a)the person was not aware the person had contravened any provision in the certificate; and
(b)the person has complied with the provision within a reasonable time after becoming aware of the contravention.
[9/2013]
(11)  Except as provided in subsection (10), it is not a defence for a person charged with an offence under subsection (9) that the person did not intend to or did not knowingly contravene any provision in the certificate.
[9/2013]
(12)  Any pertinent financial institution which contravenes subsection (8), and every officer of the pertinent financial institution who fails to take all reasonable steps to secure compliance by the pertinent financial institution with that subsection, shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $2,000 and, in the case of a continuing offence, to a further fine not exceeding $200 for every day or part of a day during which the offence continues after conviction.
[9/2013]
(13)  Despite section 53(2) but subject to section 125, during the period beginning on the date on which the Minister publishes the notice under section 69(7) in the Gazette on the restructuring of the share capital of a pertinent financial institution or, where the notice is not published in the Gazette, the date on which the Authority publishes the certificate under subsection (5) in the Gazette on the restructuring of the share capital, and ending on the date on which the certificate comes into effect —
(a)no resolution may be passed, and no order may be made, for the winding up of the pertinent financial institution;
(b)no judicial manager may be appointed under Part 7 of the Insolvency, Restructuring and Dissolution Act 2018 in relation to the pertinent financial institution;
(c)no proceedings may be commenced or continued against the pertinent financial institution in respect of any business of the pertinent financial institution;
(d)no enforcement order, distress or other legal process may be commenced, levied or continued against any property of the pertinent financial institution;
[Act 25 of 2021 wef 01/04/2022]
(e)no steps may be taken to enforce any security over any property of the pertinent financial institution; and
(f)any sale, transfer, assignment or other disposition of any property of the pertinent financial institution is void, except for (where the pertinent financial institution is an insurer licensed under the Insurance Act 1966) any payment of claims to policy owners or claimants, other than policy owners who are related corporations of the pertinent financial institution.
[9/2013; 31/2017; 40/2018]
(14)  In subsection (12), “officer”, in relation to a pertinent financial institution, includes —
(a)a director, a secretary or an executive officer of the pertinent financial institution;
(b)a receiver or manager of any part of the undertaking of the pertinent financial institution appointed under a power contained in any instrument; and
(c)a liquidator of the pertinent financial institution appointed in a voluntary winding up.
[9/2013]