Companies (Amendment) Bill

Bill No. 11/1974

Read the first time on 14th March 1974.

An Act to amend the Companies Act (Chapter 185 of the Revised Edition).

Be it enacted by the President with the advice and consent of the Parliament of Singapore, as follows: —

Short title and commencement

1. This Act may be cited as the Companies (Amendment) Act, 1974, and shall come into operation on such date as the Minister may, by notification in the Gazette, appoint.

Amendment of section 4

2. Section 4 of the Companies Act (hereinafter in this Act referred to as “the principal Act”) is hereby amended by deleting the words “or documents” appearing in the second and third lines of the definition of “accounts” therein and substituting therefor the expression “(other than auditors’ reports or directors’ reports)”.

Amendment of section 6A

3. Section 6A of the principal Act is hereby amended by inserting immediately after the word “sections” appearing in the second line of subsection (1) thereof the expression “133A”.

New section 19A

4. The principal Act is hereby amended by inserting immediately after section 19 thereof the following section: —

“Power of company to provide for employees on cessation of business

19A.—(1) The powers of the company shall, if they would not otherwise do so, be deemed to include power to make provision, in connection with any cessation of the whole or any part of the business carried on by the company or any subsidiary of the company, for the benefit of persons employed or formerly employed by the company or its subsidiary.

(2) Subsection (1) of this section relates only to the capacity of a company as a body corporate and is without prejudice to any provision in a company’s memorandum or articles requiring any exercise of the power mentioned in that subsection to be approved by the company in general meeting or otherwise prescribing the manner in which that power is to be exercised.”.

Amendment of section 28

5. Subsection (5) of section 28 of the principal Act is hereby amended by deleting the word “ten” wherever it appears in paragraphs (a) and (b) thereof and substituting therefor in each case the word “five”.

Amendment of section 35

6. Section 35 of the principal Act is hereby amended —

(a)

by deleting subsections (3), (3A) and (3B) thereof; and

(b)

by deleting the marginal note thereto and substituting therefor the following: —

“Ratification by company of contracts made before incorporation.”.

Amendment of section 65

7. Section 65 of the principal Act is hereby amended by deleting the word “ten” appearing in the eleventh line of subsection (1) thereof and substituting therefor the word “five”.

Amendment of section 67

8. Section 67 of the principal Act is hereby amended —

(a)	by inserting immediately after the word “company” appearing in the seventh and in the ninth lines of paragraph (b) of subsection (2) thereof in each case the words “or a subsidiary of the company”;
(b)	by inserting immediately after the word “company” appearing in the sixth line of paragraph (c) of subsection (2) thereof the words “or its holding company”; and
(c)	by inserting immediately after the word “dollars” appearing at the end of subsection (3) thereof the expression “and any transfer or allotment of shares pursuant to a purchase or dealing prohibited by subsection (1) of this section shall be void”.

Amendment of section 69C

9. Section 69C of the principal Act is hereby amended —

(a)

by deleting the words “one-tenth” appearing in the seventh line of subsection (1) thereof and substituting therefor the words “five per cent”;

(b)

by deleting the words “one-tenth” appearing in the ninth line of subsection (2) thereof and substituting therefor the words “five per cent”; and

(c)

by inserting immediately after subsection (3) thereof the following subsection: —

“(4) Every person who, at the time this subsection comes into operation —

(a)	has an interest or interests in one or more voting shares in a company; or
(b)	in the case of a company the share capital of which is divided into two or more classes of shares, has an interest or interests in one or more voting shares included in one of those classes,

and the nominal value of that share or the aggregate of the nominal amount of those shares is equal to five per cent or more but less than ten per cent of the aggregate of the nominal amount of all the voting shares in the company has a substantial shareholding in the company and is a substantial shareholder of that company and shall be under an obligation to give notice in writing to the company stating full particulars of the voting shares in the company in which he has an interest or interests and the full particulars of each such interest and of the circumstances by reason of which he has that interest.

(5) The provisions of this Division shall apply to a substantial shareholder under subsection (4) of this section.”.

Amendment of section 69E

10. Section 69E of the principal Act is hereby amended by deleting the word “fourteen” appearing in subsection (2) thereof and substituting therefor the word “seven”.

Amendment of section 69F

11. Section 69F of the principal Act is hereby amended by deleting the word “fourteen” appearing in subsection (2) thereof and substituting therefor the word “seven”.

New section 69N

12. The principal Act is hereby amended by inserting immediately after section 69M thereof the following section: —

“Power of company to require disclosure of beneficial interests in its voting shares

69N.—(1) Any company all of the shares in which are listed for quotation on the official list of a Stock Exchange (as defined in the Securities Industry Act, 1973 (Act 17 of 1973)) may by notice in writing require any member of the company within such reasonable time as is specified in the notice —

(a)	to inform it whether he holds any voting shares in the company as beneficial owner or as trustee; and
(b)	if he holds them as trustee, to indicate so far as he can the persons for whom he holds them (either by name or by other particulars sufficient to enable those persons to be identified) and the nature of their interest.

(2) Where a company is informed in pursuance of a notice given to any person under subsection (1) of this section or under this subsection that any other person has an interest in any of the voting shares in a company, the company may by notice in writing require that other person within such reasonable time as is specified in the notice —

(a)	to inform it whether he holds that interest as beneficial owner or as trustee; and
(b)	if he holds it as trustee, to indicate so far as he can the persons for whom he holds it (either by name or by other particulars sufficient to enable them to be identified) and the nature of their interest.

(3) Any company to which this section applies may by notice in writing require any member of the company to inform it, within such reasonable time as is specified in the notice, whether any of the voting rights carried by any voting shares in the company held by him are the subject of an agreement or arrangement under which another person is entitled to control his exercise of those rights and, if so, to give particulars of the agreement or arrangement and the parties to it.

(4) Whenever a company receives information from a person in pursuance of a requirement imposed on him under this section with respect to shares held by a member of the company, it shall be under an obligation to inscribe against the name of that member in a separate part of the register kept by it under section 69J —

(a)	the fact that the requirement was imposed and the date on which it was imposed; and
(b)	the information received in pursuance of the requirement.

(5) The provisions of section 69J shall apply in relation to the part of the register referred to in subsection (4) of this section as they apply in relation to the remainder of the register and as if references to subsection (1) of that section included references to subsection (4) of this section.

(6) Subject to subsection (7) of this section, any person who —

(a)	fails to comply with a notice under this section; or
(b)	in purported compliance with such a notice makes any statement which he knows to be false in a material particular or recklessly makes any statement which is false in a material particular,

shall be guilty of an offence and shall be liable on conviction to imprisonment for a term not exceeding two years or to a fine not exceeding five thousand dollars.

(7) A person shall not be guilty of an offence under subsection (6)(a) of this section if he proves that the information in question was already in the possession of the company or that the requirement to give it was for any other reason frivolous or vexatious.”.

Amendment of section 105

13. Section 105 of the principal Act is hereby amended by inserting immediately after subsection (1) thereof the following subsection: —

“(1A) Where an application is made to a company for a person to be registered as a member in respect of shares which have been transferred or transmitted to him by act of parties or operation of law, the company shall not refuse registration by virtue of any discretion in that behalf conferred by the articles unless it has served on the applicant, within one month beginning with the day on which the application was made, a notice in writing stating the facts which are considered to justify refusal in the exercise of that discretion.”.

Amendment of section 131

14. Section 131 of the principal Act is hereby amended by inserting immediately after subsection (7) thereof the following subsection: —

“(7A) For the purposes of this section an interest of a member of a director’s family shall be treated as an interest of the director.”.

New sections 132B, 132C and 132D

15. The principal Act is hereby amended by inserting immediately after section 132A thereof the following sections: —

“Power of directors to have regard to interest of its employees, members and rulings of the Securities Industry Council

132B. The matters to which the directors of a company are entitled to have regard in exercising their powers shall include —

(a)	the interests of the company’s employees generally, as well as the interests of its members; and
(b)	the rulings of the Securities Industry Council on the interpretation of the principles and rules of and the practice to be followed under the Singapore Code on Take-overs and Mergers.

Approval of company required for disposal by directors of company’s undertaking or property

132C.—(1) Notwithstanding anything in a company’s memorandum or articles, the directors shall not carry into effect any proposals for disposing of the whole or substantially the whole of the company’s undertaking or property unless those proposals have been approved by the company in general meeting.

(2) The Court may, on the application of any member of the company, restrain the directors from entering into a transaction in contravention of subsection (1) of this section.

(3) A transaction entered into in contravention of subsection (1) of this section shall, in favour of any person dealing with the company for valuable consideration and without actual notice of the contravention, be as valid as if that subsection has been complied with.

(4) This section shall not apply to proposals for disposing of the whole or substantially the whole of the company’s undertaking or property made by a receiver and manager of any part of the undertaking or property of the company appointed under a power contained in any instrument or a liquidator of a company appointed in a voluntary winding up.

Approval of company required for issue of shares by directors

132D.—(1) Notwithstanding anything in a company’s memorandum or articles, the directors shall not, without the prior approval of the company in general meeting, exercise any power of the company to issue shares.

(2) Approval for the purposes of this section may be confined to a particular exercise of that power or may apply to the exercise of that power generally; and any such approval may be unconditional or subject to conditions.

(3) Any approval for the purposes of this section shall continue in force until —

(a)	the conclusion of the annual general meeting commencing next after the date on which the approval was given; or
(b)	the expiration of the period within which the next annual general meeting after that date is required by law to be held,

whichever is the earlier; but any approval may be previously revoked or varied by the company in general meeting.

(4) The directors may issue shares notwithstanding that an approval for the purposes of this section has ceased to be in force if the shares are issued in pursuance of an offer, agreement or option made or granted by them while the approval was in force and they were authorised by the approval to make or grant an offer, agreement or option which would or might require shares to be issued after the expiration of the approval.

(5) Section 154 shall apply to any resolution whereby an approval is given for the purposes of this section.

(6) Any issue of shares made by a company in contravention of this section shall be void and consideration given for the shares shall be recoverable accordingly.

(7) Any director who knowingly contravenes, or permits or authorises the contravention of, this section with respect to any issue of shares shall be liable to compensate the company and the person to whom the shares were issued for any loss, damages or costs which the company or that person may have sustained or incurred thereby; but no proceedings to recover any such loss, damages or costs shall be commenced after the expiration of two years from the date of the issue.

(8) This section shall not apply to any issue of shares of a company before —

(a)	the beginning of the annual general meeting commencing next after the commencement of this section; or
(b)	the expiration of the period within which the next annual general meeting after the commencement of this section is required by law to be held,

whichever is the earlier.”.

New section 133A

16. The principal Act is hereby amended by inserting immediately after section 133 thereof the following section: —

“Prohibition of loans to persons connected with directors of lending company

133A.—(1) Subject to the provisions of this section, it shall not be lawful for a company —

(a)	to make a loan to another company; or
(b)	to enter into any guarantee or provide any security in connection with a loan made to another company by a person other than the first-mentioned company,

if a director or directors of the first-mentioned company is or together are interested in shares in the other company of a nominal value equal to one-fifth or more of the nominal value of its equity share capital.

(2) Subject to the provisions of this section, it shall not be lawful for a company —

(a)	to make a loan to a person who is a member of the family of any of its directors or of a director of its holding company; or
(b)	to enter into any guarantee or provide any security in connection with a loan made to any such person by any other person.

(3) Subsection (1) of this section shall not apply to anything done by a company where the other company is its subsidiary or holding company or a subsidiary of its holding company; and neither subsection (1) nor subsection (2) of this section shall apply, in the case of a company whose ordinary business includes the lending of money or the giving of guarantees in connection with loans made by other persons, to anything done by the company in the ordinary course of that business.

(4) For the purposes of subsection (1) of this section an interest of a member of a director’s family shall be treated as an interest of the director.”.

New section 135A

17. The principal Act is hereby amended by inserting immediately after section 135 thereof the following section: —

“Duty of director to notify Stock Exchange of acquisition, etc., of its securities

135A.—(1) Where a person is obliged by virtue of section 135 to notify a company of any matter within any period, then, if that matter relates to shares or debentures listed on a Stock Exchange (as defined in the Securities Industry Act, 1973 (Act 17 of 1973)) he shall also be obliged to notify the Stock Exchange of that matter within the like period; and the Stock Exchange may publish, in such manner as it may determine, any information received by it under this subsection.

(2) Any person who fails to comply with subsection (1) of this section shall be guilty of an offence under this Act and shall be liable on conviction to imprisonment for a term not exceeding three years or to a fine not exceeding ten thousand dollars and, in the case of a continuing offence, to a further fine of one thousand dollars for every day or part thereof during which the offence is continued after conviction.”.

New section 137A

18. The principal Act is hereby amended by inserting immediately after section 137 thereof the following section: —

“Alteration of articles so as to improve director’s emoluments

137A.—(1) A company shall not at any meeting alter or add to its articles so as to provide emoluments or improve emoluments for a director of a company in respect of his office as such unless the provision is approved by a resolution that is not related to other matters.

(2) In this section “emoluments” in relation to a director includes fees and percentages, any sums paid by way of expenses allowance in so far as those sums are charged to income tax in Singapore, any contribution paid in respect of a director under any pension scheme and any benefits received by him otherwise than in cash in respect of his services as director.”.

Amendment of section 179

19. Section 179 of the principal Act is hereby amended by inserting immediately after subsection (11) thereof the following subsection: —

“(12) (a) The Minister, pursuant to a notice made under subsection (11) of this section, has specified that a non-statutory code known as “The Singapore Code on Take-overs and Mergers” (herinafter in this section referred to as “the Code”) shall have effect in relation to take-over and merger transactions and the Code shall be administered and enforced by a body known as “The Securities Industry Council”.
(b)	The Minister, on the advice of the Securities Industry Council, may from time to time, revise the Code by varying, amending or adding to the provisions thereof and any revision thereof shall be published in the Gazette.
(c)	The Securities Industry Council may from time to time issue rulings on the interpretation of the general principles and rules in the Code and lay down the practice to be followed by parties concerned in a take-over or merger transaction and such rulings or practice shall be final and not be capable of being challenged in any court.
(d)	A failure of any party concerned in a take-over or merger transaction to observe any of the provisions of the Code shall not of itself render that party liable to criminal proceedings but any such failure may, in any proceedings whether civil or criminal, be relied upon by any party to the proceedings as tending to establish or to negative any liability which is in question in the proceedings.
(e)	Nothing in paragraph (d) of this subsection shall be construed as preventing the Securities Industry Council from invoking such sanctions (including public censure) as it may decide in relation to breaches of the Code by parties to a take-over or merger transaction.”.

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