Companies (Amendment) Bill

Bill No. 24/1989

Read the first time on 22nd March 1989.

An Act to amend the Companies Act (Chapter 50 of the 1988 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 1989 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 is amended —

(a)

by deleting the words “but an invitation to the public by a prescribed corporation as defined in section 44(7) shall not be deemed to be an invitation to the public to deposit money with or to lend money to the corporation for the purpose of Division 5 of Part IV” at the end of subsection (5) and substituting the following words:

“but an invitation by a prescribed corporation as defined in sections 44(7) and 97(8) shall be deemed not to be an invitation to the public to subscribe for or purchase debentures of the corporation or an offer to the public of debentures of the corporation for subscription or purchase for the purposes of Division 5 of Part IV”; and

(b)

by deleting subsection (6) and substituting the following subsection:

“As to what constitutes an offer to the public

(6) Any reference in this Act to offering shares or debentures to the public or to issuing an invitation to the public in respect of shares or debentures shall, unless the contrary intention appears, be construed as including a reference to offering them to any section of the public or to issuing of an invitation to any section of the public, as the case may be, whether selected as clients of the person making the offer or issuing the invitation or in any other manner.”.

Amendment of section 43

3. Section 43 of the Companies Act is amended by deleting subsection (2) and substituting the following subsections:

“(2) Subsection (1) shall not apply if the form of application is issued, circulated or distributed in connection with —

(a)	an offer or invitation in respect of shares or debentures which is not made or issued to the public; or
(b)	an offer made or invitation issued to the public in respect of shares or debentures that is exempted under Division 5A of this Part.

(2A) Nothing in this Division and Division 5 of this Part shall apply to an offer or invitation in respect of shares or debentures for sale to the public in a case where the offer or invitation relates to shares or debentures that have been previously issued and the shares or debentures are of a class that are listed for quotation on a stock exchange in Singapore approved by the Minister under section 16 of the Securities Industry Act [Cap. 289].”.

Amendment of section 44

4. Section 44 of the Companies Act is amended —

(a)

by deleting paragraph (c) of subsection (1) and substituting the following paragraph:

“(c)

the document is described or referred to in the prospectus and in any other document whether constituting or relating to the invitation in any of the following forms of debt obligation, in accordance with this section:

(i)	unsecured loan stock, unsecured note, unsecured deposit note, unsecured debenture or certificate of unsecured debenture stock, bonds (including bearer and Eurobonds) short or medium term notes (including Euronotes) or convertible loan stock;
(ii)	mortgage bonds, mortgage debenture or certificate of mortgage debenture stock;
(iii)	a secured debenture or certificate of debenture stock; or
(iv)	such other form as the Registrar may approve as having effect for the purposes of this section but subject to such conditions as he may impose,”;

(b)

by deleting the words “as an unsecured note or an unsecured deposit note” in subsection (3) and substituting the words “in the form described in subsection (1)(c)(i) or approved under subsection (1)(c)(iv)”;

(c)

by deleting the words “as a mortgage debenture or certificate of mortgage debenture stock” in subsection (4) and substituting the words “in the form described in subsection (1)(c)(ii)”;

(d)

by deleting the words “as a debenture or certificate of debenture stock” in the third line of subsection (5) and substituting the words “in the form described in subsection (1)(c)(iii)”;

(e)

by deleting the words “a mortgage debenture or certificate of mortgage debenture stock” in subsection (5)(a) and substituting the words “in the form described in subsection (1)(c)(ii)”;

(f)

by deleting subsection (10); and

(g)

by deleting subsection (11) and substituting the following subsection:

“(11) For the purposes of this section, a certificate issued by a borrowing corporation certifying, in respect of any deposit with or a loan to the corporation, that the registered holder (or in the case of a bearer instrument, the bearer) of a specified number or value of the debt obligations described or approved under subsection (1)(c), issued by the corporation upon or subject to the terms and conditions contained in a trust deed referred to or identified in the certificate, shall be deemed to be a document evidencing the indebtedness of that corporation in respect of that deposit or loan.”.

Amendment of section 46

5. Section 46 of the Companies Act is amended by inserting, immediately after subsection (2), the following subsections:

“(2A) Notwithstanding subsection (2), in a case where a prospectus states or implies that an application has been or will be made for permission for international securities offered thereby to be listed or quoted on a stock exchange in Singapore approved by the Minister under section 16 of the Securities Industry Act [Cap. 289], the Registrar may, by order, exempt a person from complying with any particular requirement as regards the form and content of a prospectus, as shall be specified in the order, if he considers that disclosure of that particular requirement is unnecessary for the protection of persons who may normally be expected to buy or deal in those securities, being persons who are sufficiently expert to understand the risks involved.

(2B) In subsection (2A), “international securities” means shares or debentures connected with a country outside Singapore by virtue of those shares or debentures being issued —

(a)	by a body incorporated in that country; or
(b)	by a foreign government or an international organisation,

and those shares or debentures are denominated in a currency other than the Singapore dollar.

(2C) Regulations may provide for the class or classes of international securities to which an order made under subsection (2A) applies and for such other matters as the Minister considers are expedient in connection with the issue of such securities.”.

Amendment of section 50¹

¹Original Bill omitted this title

6. Section 50 of the Companies Act is amended —

(a)

by deleting subsection (2) and substituting the following subsections:

“(2) The Registrar shall refuse to register a copy of any prospectus if —

(a)	it contains any statement or matter which, in his opinion, is misleading in the form and context in which it is included;
(b)	the copy signed by every director and by every person who is named therein as a proposed director of the corporation or by his agent authorised in writing, is not lodged with the Registrar on or before the date of its issue;
(c)	the prospectus does not appear to comply with the requirements of this Act;
(d)	there are not also lodged with the Registrar copies verified as prescribed of any consent required by section 54 to the issue of the prospectus and of all material contracts referred to in the prospectus or, in the case of such a contract not reduced in writing, a memorandum giving full particulars thereof verified as prescribed;
(e)	an excessive consideration will be paid for any property to be acquired or for services of promoters or underwriters;
(f)	it appears to him there is insufficient disclosure of material information relating to the business of the issuer or the use of the proceeds of the issue;
(g)	having regard to the financial position of the issuer, the issuer cannot reasonably be expected to be financially responsible;
(h)	having regard to the past conduct of the issuer or its directors there are reasonable grounds for believing that the business will not be conducted with integrity; or
(i)	it appears to him that it is not in the public interest to do so.

(2A) The Registrar shall not refuse to register a copy of the prospectus under subsection (2) without giving the person or company who or which filed the prospectus an opportunity of being heard.

(2B) Any person who is aggrieved by the refusal of the Registrar to register a copy of the prospectus may within 28 days of his refusal appeal to the Minister whose decision shall be final and shall be given effect to by the Registrar.”.

Repeal and re-enactment of section 58

7. Section 58 of the Companies Act is repealed and the following section substituted therefor:

“Application and moneys to be held by the company in trust in a separate bank account until allotment

58.—(1) All application and other moneys paid prior to allotment by any applicant on account of shares or debentures offered to the public shall, until the allotment of the shares or debentures, be held by the company upon trust for the applicant in a separate bank account, being a bank account that is established and kept by the company solely for the purpose of depositing the application and other moneys that are paid by applicants for those shares or debentures but there shall be no obligation or duty on any bank with whom any such moneys have been deposited to enquire into or see to the proper application of those moneys so long as the bank acts in good faith.

(2) If default is made in complying with this section every officer of the company in default 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.”.

Amendment of section 97

8. Section 97 of the Companies Act is amended by deleting subsection (8) and substituting the following subsection:

“(8) In subsection (6) or (7), “prescribed corporation” means —

(a)	a banking corporation; or
(b)	a corporation or class of corporation which has been declared by the Minister by notification in the Gazette to be a prescribed corporation for the purposes of this section.”.

Amendment of section 98

9. Section 98 of the Companies Act is amended by inserting, immediately after the word “deed” in the second line of subsection (1), the words “but subject to section 97(6) and (7)”.

New Division 5A

10. The Companies Act is amended by inserting, immediately after Division 5 of Part IV, the following Division:

“Division 5A — Exemptions from Divisions 1 and 5 in relation to Prospectus Requirements

Interpretation

106A. In this Part —

(a)	a reference to an offer of shares or debentures to the public shall be deemed to include a reference to an offer that is made pursuant to an invitation to the public in relation to shares or debentures; and
(b)	a reference to issuer is a reference to a corporation which issues or proposes to issue shares or debentures.

Offer made by or to certain persons or under certain circumstances

106B.—(1) Divisions 1 and 5 of this Part shall not apply to an offer of shares or debentures to the public if it is —

(a)

an offer to enter into an underwriting agreement, whether relating to shares or debentures that have been previously issued or not;

(b)

made, whether relating to shares or debentures that have been previously issued or not, to a person whose ordinary business it is to buy or sell shares or debentures whether as principal or as agent;

(c)

made to existing members or debenture holders of a corporation (whether or not it is renounceable in favour of persons other than existing members or debenture holders) and relates to shares in or debentures of that corporation and is not an offer to which section 47 applies;

(d)

made to existing members of a company within the meaning of section 306 and relates to shares in the corporation within the meaning of that section;

(e)

made in connection with a take over scheme which complies with the provisions of this Act applicable to such schemes; or

(f)

made, whether in relation to shares or debentures that have been previously issued or not, by a corporation to employees of the corporation, or its related corporation where the shares or debentures are to be held by or for the benefit of the employees, in accordance with an employee share investment scheme for the time being in force, if —

(i)

the employees are not induced to purchase by expectation of employment or continued employment; and

(ii)

no selling or promotional expenses are paid or incurred in connection with the offer, other than those incurred for administrative or professional services or incurred by way of commission or fee for services rendered by a dealer or investment adviser licensed under the Securities Industry Act [Cap. 289] or an exempt dealer under that Act whose carrying on the business of advising others concerning securities is solely incidental to the conduct of his business in dealing in securities.

(2) (a) Divisions 1 and 5 of this Part shall not apply to any person making an offer of shares or debentures to the public where, on the application of the issuer thereof, the Minister declares, by order, that circumstances exist whereby —
(i)	the cost of providing a prospectus outweighs the resulting protection to investors; or
(ii)	otherwise, it would not be prejudicial to the public interest if a prospectus were dispensed with.

(b) In the circumstances described in subsection (2)(a), the Minister, on making the order, may impose such conditions to the offer as he considers appropriate.

Offer made to certain institutions or persons

106C. Divisions 1 and 5 of this Part shall not apply to an offer of shares or debentures, whether or not they have been previously issued, made to —

(a)	a bank that is licensed under the Banking Act [Cap. 19] or a merchant bank that is approved under section 28 of the Monetary Authority of Singapore Act [Cap. 186];
(b)	an insurance company that is registered under the Insurance Act [Cap. 142] or a trust company registered under the Trust Companies Act [Cap. 336];
(c)	the Government or a statutory board;
(d)	any person licensed as an investment adviser under the Securities Industry Act [Cap. 289];
(e)	a pension fund or unit trust;
(f)	an investment company as defined in section 355(1) or an approved body corporate as defined under regulation 36 of the Securities Industry Regulations 1986 [G.N. No. S 206/86]; and
(g)	such other persons as the Minister may, by order, declare to be exempt purchasers,

who or which, pursuant to the offer, acquires the shares or debentures as principal or as a trustee for accounts fully managed by it who, for the purposes of this section, shall be deemed to be dealing as principal.

Offer to sophisticated investors

106D.—(1) Divisions 1 and 5 of this Part shall not apply to an offer of shares or debentures to the public, whether or not they have been previously issued, where the offer is made to not more than 50 persons, each of whom is a sophisticated investor, if —

(a)	the offer of the shares or debentures is not accompanied by an advertisement offering or calling attention to the offer or intended offer; and
(b)	no selling or promotional expenses are paid or incurred in connection with the offer other than those incurred for administrative or professional services or incurred by way of commission or fee for services rendered by a dealer or investment adviser.

(2) For the purposes of this section —

“advertisement” means —

(a)	a written or printed communication;
(b)	a communication by radio, television or other communication medium; or
(c)	a communication by means of a recorded telephone message,

that is published in connection with an offer of shares or debentures but does not include an information memorandum;

“information memorandum” means a document that is accepted by the Registrar as purporting to describe the business and affairs of the person making the offer and as having been prepared for delivery and review by sophisticated investors so as to assist them in making an investment decision in respect of shares or debentures that are being offered but does not include a prospectus;

“dealer” has the same meaning as is assigned to that expression in section 2 of the Securities Industry Act [Cap. 289];

“investment adviser” means —

(a)	a person who is licensed under the Securities Industry Act; or
(b)	an exempt dealer under section 40(d) of that Act whose carrying on the business of advising others concerning securities is solely incidental to the conduct of his business of dealing in securities;

“sophisticated investor” means —

(a)

a person who acquires the shares or debentures, pursuant to the offer, as principal if the aggregate consideration for the acquisition is not less than $200,000 (or its equivalent in foreign currencies) for each transaction whether such amount is paid for in cash, by exchange of shares or other assets; or

(b)

a person who acquires the shares or debentures pursuant to the offer as principal and —

(i)	whose total net personal assets exceed S$1 million or its equivalent in foreign currencies or whose annual income is not less than S$200,000 or its equivalent in foreign currencies at the time of the acquisition; or
(ii)	in the case of a corporation, whose total net assets exceed S$5 million in value or its equivalent in foreign currencies as determined by the last audited balance-sheet of the corporation; or

(c)

an officer of the person making the offer or his spouse, parent, brother, sister or child.

(3) Nothing in section 40(a) and (d)(iv) of the Securities Industry Act [Cap. 289] (which, in effect, requires an exempt dealer to acquire shares or debentures only through the holder of a dealer’s licence) shall apply to any of the persons or bodies specified in section 106C or this section who or which acquire shares or debentures under either of these sections as principals and who or which are classified as exempt dealers under section 40(a) and (d)(iv) of the Securities Industry Act with the result that an exempt dealer who so acquires shares or debentures under section 106C or this section shall not be regarded as contravening any provision in the Securities Industry Act.

Circumstances in which a prospectus is not required on first sale of shares or debentures acquired pursuant to exemptions in sections 106C or 106D

106E.—(1) Where shares or debentures acquired under an exemption in section 106C or 106D are first sold to any of the bodies or persons specified in either of those sections, the offer for sale shall not be regarded as an offer to the public for which a prospectus is required.

(2) Where shares or debentures, acquired under an exemption in section 106C or 106D, are first sold, other than to any of the bodies or persons specified in either of those sections, the offer for sale shall be regarded as an offer to the public for which a prospectus is required unless —

(a)

the shares or debentures to which the offer relates are listed for quotation on the Stock Exchange of Singapore Ltd. or a recognised stock exchange and have been held for at least 12 months from the date they were initially acquired, pursuant to an exemption under sections 106C or 106D; and

(b)

the seller —

(i)	gives a notice in writing to the purchaser at the time of the sale that he is buying shares or debentures acquired by the seller pursuant to an exemption under section 106C or 106D and that they are subject to the conditions in paragraph (a); and
(ii)	gives a notice in writing to the issuer from whom he originally acquired his shares or debentures containing particulars of the sale, in such form as may be prescribed, and the issuer shall maintain a record of those particulars and shall, at such periodic intervals as the Registrar may decide, lodge a report thereon with the Registrar, in such form as may be prescribed,

provided that the offer of the shares or debentures is not accompanied by an advertisement offering or calling attention to the offer and no selling or promotional expenses are paid or incurred in connection with the offer except for administrative or professional services or services performed by a dealer or investment adviser licensed under the Securities Industry Act [Cap. 289].

(3) A contract of sale of shares or debentures made or entered into in contravention of the conditions in subsection (2)(a) or (b) shall be void.

(4) The Court, on being satisfied that a contract of sale is void under subsection (3), may, on the application of the Registrar or any other person, make such order or orders as it thinks just and equitable including, without limiting the generality of the foregoing, the following orders:

(a)	an order directing the seller to refund the purchase moneys to the purchaser and directing the purchaser to return the shares or debentures to the seller;
(b)	an order directing the seller to indemnify the purchaser for any loss or damage that he may have suffered as a result of the contract being void.

(5) In subsection (2), “advertisement” has the same meaning as is assigned to that expression in section 106D(2) and “recognised stock exchange” has the same meaning as is assigned to that expression in section 106G.

Stock exchange offer

106F.—(1) Divisions 1 and 5 of this Part shall not apply to an offer of shares or debentures to the public, that have not been previously issued, in a case where the shares or debentures to be offered are, or are to be, uniform in all respects with shares or debentures previously issued and listed for quotation on a stock exchange if a statement of material facts, which complies as to form and content with Part VI of the Fifth Schedule, is lodged with, and accepted by, the Registrar and the stock exchange.

(2) A dealer licensed under the Securities Industry Act [Cap. 289] who is not acting as agent of a purchaser and who receivers an order to buy shares or debentures, pursuant to the offer, shall send or deliver to the purchaser of the shares or debentures, the statement of material facts referred to in subsection (1)(b) within 3 business days after the agreement for sale is made.

(3) An agreement for purchase and sale referred to in subsection (2) shall not be binding upon the purchaser if by the close of business on the third business day, after he received the statement of material particulars, he informs the dealer from whom he purchased the shares or debentures, by written or telegraphic notice, that he does not intend to be bound by the agreement.

(4) Subsection (3) shall not apply if the purchaser is a dealer or investment adviser licensed under the Securities Industry Act [Cap. 289] or if the purchaser sells or otherwise transfers beneficial ownership of the shares or debentures before the expiration of the time referred to in subsection (3).

(5) The burden of proving that the period specified in subsection (3) has passed shall lie on the dealer who sold the shares or debentures.

(6) For the purposes of this section —

(a)

a statement of material facts referred to in subsection (1)(b) shall be deemed to be a prospectus for the purposes of this Act and all written laws and rules of law as to content of prospectuses (to the extent that they may be applicable) and as to liability in respect of statements in and omissions from prospectuses or otherwise relating to prospectuses shall apply to a statement of material facts and have effect accordingly;

(b)

“dealer” has the same meaning as is assigned to that expression in section 2 of the Securities Industry Act, and “stock exchange” means a stock exchange that has been approved by the Minister under section 16 of that Act;

(c)

(i)	the receipt of a statement of material particulars by a dealer, who acts solely as agent of the purchaser with respect to the purchase of the shares or debentures, shall be receipt by the purchaser as on the date on which the dealer receives the statement of material particulars; and
(ii)	the receipt of a notice referred to in subsection (3) by a dealer who acts as agent for the seller with respect to the sale of the shares or debentures is receipt by the seller as on the date on which the agent receives the notice.

(7) The Minister may, by regulations or by order, impose any conditions on an offer under this section which he considers necessary for the protection of investors.

Offer of international debentures

106G.—(1) Divisions 1 and 5 of this Part shall not apply to an offer to the public of debentures by a body incorporated in a country outside Singapore where the offer is made by a recognised dealer to such institutional, professional or business investors as the Minister may, by notification in the Gazette, specify, being persons or bodies that appear to him sufficiently expert to understand any risk involved in buying or selling those debentures (whether as principal or agent) and the offer complies with the conditions set forth in subsection (2).

(2) The conditions referred to in subsection (1) are that —

(a)	the debentures are denominated in a currency, other than the Singapore dollar, that is equivalent in value to at least US$5,000; and
(b)	the shares of the issuing body corporate are listed on a recognised stock exchange or the offer is guaranteed by a corporation whose shares are listed on a recognised stock exchange.

(3) For the purposes of this section —

“recognised dealer” means a person who —

(a)	holds a dealer’s licence under the Securities Industry Act [Cap. 289]; or
(b)	is an exempt dealer under section 40(c) or (d) of that Act.

“recognised stock exchange” means a body corporate declared by the Minister, by notification in the Gazette, to be a recognised stock exchange.

(4) The Minister may by notification in the Gazette add to, vary or amend the conditions specified in subsection (2).

Offer of debentures made by the Government or international financial institutions

106H. Divisions 1 and 5 of this Part shall not apply to an offer to the public of debentures made by or guaranteed by —

(a)	the Government; or
(b)	an international financial institution of which Singapore is a member.

Reporting requirements

106I.—(1) Where an issuer intends to invoke an exemption under this Division, he shall lodge with the Registrar a report of his intention to sell the shares or debentures, in such form as may be prescribed, 7 days prior to the sale.

(2) The issuer shall maintain a register in the prescribed form of the shares or debentures sold under subsection (1).

(3) Particulars of the sale of the shares or debentures shall be entered in the register within 3 days of the sale.

(4) Upon the request of the Registrar, the issuer shall produce for inspection the register maintained under subsection (2) and the Registrar may make extracts from the register.

(5) The Registrar may supply a copy of an extract from a register to any person who, in his opinion, should, in the public interest, be informed of the sale of the shares or debentures disclosed in the register.

Revocation of exemption

106J.—(1) Where the Minister considers that it is necessary in the public interest or for the protection of investors, he may, by order, revoke any exemption under this Division, subject to such conditions as he thinks fit.

(2) The Minister may make an order, under subsection (1), without giving the person affected by the order an opportunity of being heard but he shall provide an opportunity for such a hearing within 14 days of the making of the order and the order shall remain in effect until the hearing is completed.

(3) An order made under this section shall be final and conclusive and there shall be no appeal therefrom.

Power to conduct investigations

106K. Where the Minister has reason to suspect that a person has committed an offence under this Act or the regulations or has been guilty of fraud or dishonesty in relation to any exempted offer to which this Division applies, he may direct such investigation as he thinks expedient for the due administration of this Act and for this purpose may invoke all the powers conferred upon him by this Act in respect of investigations, whether under Part IX or otherwise, or by the Securities Industry Act [Cap. 289] in respect of any dealing in, or trading in, securities.

Transactions under exempted offers subject to Division II of Part XII of this Act and Part IX of Securities Industry Act

106L. For the removal of doubts, it is hereby declared that in relation to any transaction carried out under an exempted offer under this Part, nothing in this Part shall limit or diminish any liability which any person may incur in respect of any relevant offence under Division II of Part XII of this Act or Part IX of the Securities Industry Act or any penalty, award of compensation or punishment in respect of any such offence.”.

Amendment of section 131

11. Section 131 of the Companies Act is amended by inserting, immediately after subsection (3), the following subsection:

“(3A) The reference to a charge on book debts in subsection (3)(f) shall not include a reference to a charge on a negotiable instrument or on debentures, stock, shares or bonds of the Government.”.

Amendment of section 143

12. Section 143 of the Companies Act is amended —

(a)

by deleting the words “one month” in the eighth line of subsection (1) and substituting the words “14 days”; and

(b)

by inserting, immediately after subsection (1), the following subsection:

“(1A) In subsection (1), the word “particulars”, in relation to the situation of the registered office, shall be deemed to include the address and designation of the situation or address of the registered office.”.

Amendment of section 146

13. Section 146 of the Companies Act is amended by inserting, immediately before the word “member” in the twelfth line of subsection (1), the word “practising”.

Amendment of section 149

14. Section 149 of the Companies Act is amended by inserting, immediately after subsection (12), the following subsections:

“(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.

(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.

(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 the date of commencement of the Companies (Amendment) Act 1989 shall, after that date, be treated as subsisting by virtue of the corresponding provision made under this section.”.

Amendment of section 160A

15. Section 160A of the Companies Act is amended —

(a)

by deleting the words “unless the arrangement is first approved by a resolution of the company in general meeting and, if the director or connected person is a director of its holding company or a person connected with such a director, by a resolution in general meeting of the holding company” in subsection (1) and substituting the following words:

“unless the arrangement is first approved —

(i)	in the case of a director of the company, or a person connected with that director, by a resolution of the company in general meeting; and
(ii)	in the case of a director of the holding company, or a person connected with that director, by a resolution of the holding company in general meeting”; and

(b)

by deleting the words “is not less than $5,000 but (subject to that)” in subsection (2).

Amendment of section 160B

16. Section 160B of the Companies Act is amended —

(a)

by deleting the words “any body corporate, wherever incorporated” in subsection (1) and substituting the words “any such company”; and

(b)

by inserting, immediately after subsection (1), the following subsection:

“(1A) No approval shall be required to be given under section 160A by a holding company by reason only of the fact that the arrangement is between a company and a person connected with a director of the holding company, where the person connected with the director of the holding company is the holding company itself and the only reason for its being so connected is the interest or deemed interest of the director, or that of a person connected with that director, in the equity share capital of the holding company.”.

Amendment of section 160D

17. Section 160D of the Companies Act is amended —

(a)

by deleting the words “except where the context otherwise requires,” in subsection (1)(b);

(b)

by deleting the comma at the end of subsection (1)(d) and substituting a full-stop;

(c)

by deleting the words “unless that person is also a director of the company.” at the end of subsection (1);

(d)

by inserting, immediately after subsection (2), the following subsection:

“(2A) For the purposes of subsection (1), a holding company shall not be deemed to be a person connected with a director of that holding company by reason only of the interest which the director may have or be deemed to have in the equity share capital of the holding company.”; and

(e)

by deleting the words “subsection (2)” in subsection (5) and substituting the words “subsections (2) and (2A) and section 160B”.

Amendment of section 171

18. Section 171(1A)(c) of the Companies Act is amended —

(a)	by deleting the words “Singapore Society of Accountants” and substituting the words “Institute of Certified Public Accountants of Singapore”; and
(b)	by inserting, immediately before the word “member” wherever it appears, in each case the word “practising”.

Amendment of section 177

19. Section 177 of the Companies Act is amended by deleting subsection (5).

Amendment of section 199

20. Section 199 of the Companies Act is amended —

(a)

by inserting, immediately after subsection (2), the following subsection:

“(2A) Every public company shall devise and maintain, during the financial year of the company, a system of internal accounting controls sufficient to provide a reasonable assurance that —

(a)	assets are safeguarded against loss from unauthorised use or disposition; and
(b)	transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair profit and loss accounts and balance-sheets and to maintain accountability of assets.”; and

(b)

by deleting the marginal note and substituting the following marginal note: “Accounting records and systems of control.”.

New section 201B

21. The Companies Act is amended by inserting, immediately after section 201A, the following section:

“Audit committees

201B.—(1) Every listed company shall, within 12 months of the commencement of the Companies (Amendment) Act 1989 or such further period as the Registrar may, in any particular case, allow, have an audit committee.

(2) An audit committee shall be appointed by the directors from among their number (pursuant to a resolution of the board of directors) and shall be composed of not fewer than 3 members of whom a majority shall not be —

(a)	executive directors or employees of the company or any related corporation;
(b)	a spouse, parent, brother, sister, son or adopted son or daughter or adopted daughter of an executive director or employee of the company or of any related corporation; or
(c)	any person having a relationship which, in the opinion of the board of directors, would interfere with the exercise of independent judgment in carrying out the functions of an audit committee.

(3) Members of an audit committee shall be appointed for a period of 3 years and shall be eligible for re-election.

(4) The members of an audit committee shall elect a chairman from among their number who is not an executive director or employee of the company or any related corporation.

(5) The functions of an audit committee shall be —

(a)

to review —

(i)	with the auditor, the audit plan;
(ii)	with the auditor, his evaluation of the system of internal accounting controls;
(iii)	with the auditor, his audit report;
(iv)	the assistance given by the company’s officers to the auditor;
(v)	the scope and results of the internal audit procedures; and
(vi)	the balance-sheet and profit and loss account of the company and, if it is a holding company, the consolidated balance-sheet and profit and loss account, submitted to it by the company or the holding company, and thereafter to submit them to the directors of the company or the holding company; and

(b)

to nominate a person as auditor, notwithstanding anything contained in the articles or under section 205,

together with such other functions as may be agreed to by the audit committee and the board of directors.

(6) The auditor has the right to appear and be heard at any meeting of the audit committee, without charge and as part of his ordinary duties, and shall appear before the committee when required to do so by the committee.

(7) Upon the request of the auditor, the chairman of the audit committee shall convene a meeting of the committee to consider any matters the auditor believes should be brought to the attention of the directors or shareholders.

(8) Each audit committee may regulate its own procedure and in particular the calling of meetings, the notice to be given of such meetings, the voting and proceedings thereat, the keeping of minutes and the custody, production and inspection of such minutes.

(9) Every audit committee shall furnish to the auditor a certificate, in such form as may be prescribed, for him to attach to the report which he, as auditor, is required to make under section 207 stating that the audit committee has discharged all its functions under subsection (5) conscientiously and to the best of its ability.

(10) In subsection (1), “listed company” means a company that is incorporated in Singapore and has been admitted to the official list of a stock exchange in Singapore and has not been removed from the official list.”.

Amendment of section 207

22. Section 207 of the Companies Act is amended by inserting, immediately after subsection (9), the following subsections:

“(9A) Notwithstanding subsection (9), if an auditor of a company, in the course of the performance of his duties as auditor, has reason to believe that an offence involving fraud or other dishonesty is being or has been committed by officers or employees of the company, he shall immediately report the matter to the Minister.

(9B) No duty to which an auditor of a company may be subject shall be regarded as having been contravened by reason of his reporting the matter referred to in subsection (9A) in good faith to the Minister”.

Amendment of section 372

23. Section 372(1)(d) of the Companies Act is amended by inserting, immediately after the word “situation”, the words “, address or designation of situation or address”.

Amendment of section 400

24. Section 400 of the Companies Act is amended —

(a)

by deleting subsections (3), (4) and (8); and

(b)

by deleting subsection (10) and substituting the following subsection:

“(10) In this section, a reference to an offer or offering of shares for subscription or purchase shall be construed as including an offer of shares by way of barter or exchange.”.

New section 409B

25. The Companies Act is amended by inserting, immediately after section 409A, the following section:

“Investigations by Commercial Affairs Department

409B.—(1) The Director or a Commercial Affairs Officer, belonging to a body known as the Commercial Affairs Department which is constituted as a Department of the Ministry of Finance, may exercise all or any of the powers in relation to police investigations conferred by the Criminal Procedure Code [Cap. 68] in any case where a seizable offence has been committed under this Act [Cap. 289] or the Securities Industry Act or in any case where a seizable offence is disclosed under any written law in the course of an investigation under this Act or the Securities Industry Act.

(2) The Director or a Commercial Affairs Officer referred to in subsection (1) may, by order of the Public Prosecutor, be authorised to exercise all or any of the powers in relation to police investigations conferred by the Criminal Procedure Code in any case where a non-seizable offence has been committed under this Act or the Securities Industry Act or in any case where a non-seizable offence is disclosed under any written law in the course of investigations under this Act or the Securities Industry Act.

(3) A reference to a Commercial Affairs Officer in this section is a reference to a person —

(a)	who has been appointed by the Minister to exercise the powers in relation to police investigations referred to in the section; and
(b)	who had his appointment as a Commercial Affairs Officer published in the Gazette.

(4) In this section, “seizable offence” and “non-seizable offence” have the meanings assigned to those expressions in section 2 of the Criminal Procedure Code [Cap. 68].”.

Amendment of section 411

26. Section 411 of the Companies Act is amended by inserting, immediately after paragraph (b), the following paragraph:

“(ba)

any offer to the public of shares or debentures that is exempted from the prospectus requirements under Division 5A of Part IV;”.

New PART VI of Fifth Schedule

27. The Companies Act is amended by inserting, immediately after Part V of the Fifth Schedule, the following Part:

“Part VI

Section 106F

“STATEMENT OF MATERIAL FACTS

Copies of this document have been lodged with the Registrar and the Stock Exchange of Singapore Ltd. who or which takes no responsibility for the contents of the document. Neither has the Registrar nor the Stock Exchange in any way considered the merits of the *shares/debentures as an investment.

................................................................
(full name of issuer)

.............................................................................................
(address of registered office of issuer)

1.	State the business carried on and to be carried on by the issuer and its subsidiary and the general development of the business within the preceding 5 years and indicate any material changes in the affairs of the issuer since the last annual report.

2.	Set out the description, designation and number of *shares/debentures being offered by the issuer.

Set out the offering price, underwriting discounts or commissions and the estimated net proceeds to the issuer on an aggregate basis. If it is not possible to state the offering price or the underwriting discount or commissions, the method by which they are to be determined shall be explained. Give the range of the market price during the previous 90 days.

State the principal purposes for which the estimated net proceeds to be derived by the issuer from the sale of the *shares/debentures to be offered are intended to be used and the approximate amount intended to be used for each such purpose. If any material amounts of other funds are to be used in conjunction with the proceeds state the amounts and sources of such other funds.

5.	State the place where issuer was incorporated and the date of incorporation.

6.	Give names and addresses of the directors of the issuer.

State the share and loan capital of the issuer showing in the case of the share capital the authorised share capital and the issued and the paid up capital and in the case of loan capital state the total amount of debentures issued and outstanding at the date of the statement together with rate of interest payable thereon.

8.	Outline briefly the manner in which the *shares/debentures offered are to be distributed, giving particulars of any outstanding or proposed underwriting, including the name and address of each under-writer and sub-underwriter.

9.	Give the profits, prospects and dividends of the issuer and provide the following:

(a)	a tabulation for each of the last 5 financial years immediately preceding the offer in the following format:

Year ended

Profit before tax

Profit after tax

Exceptional items

Gross earnings per share

Gross rate of dividend

(b)

a statement as to the financial and trading prospects of the corporation or group, together with any material information which will be relevant thereto, including all special trade factors or risks (if any) which are unlikely to be known or anticipated by the general public and which could materially affect the profits; and

(c)	a statement by the directors that in their opinion the working capital available is sufficient, or, if not, how it is proposed to provide the additional working capital thought by the directors to be necessary.

10.	Give the number of shares of the issuer owned by each substantial share holder as defined in section 81 of the Act.

11.	Give a brief statement of any material legal proceedings to which the issuer or any of its subsidiaries is a party or of which any of their property is the subject. Make a similar statement as to any such proceedings known to be contemplated.

12.

State the prices at which *shares/debentures of the issuer have been issued for cash or traded within the 12 months immediately preceding the date of this statement. For shares which have been traded, give price ranges and volume traded for each of those months and for *shares/debentures which have been issued during those months, state the number of *shares/debentures issued at each price. If any *shares/debentures have been issued for services, state the nature and value of the services and give the name and address of the person who received the *shares/debentures.

13.

Give the dates and parties to and the general nature of every material contract entered into by the issuer not being a contract entered into in the ordinary course of business carried on or intended to be carried on by the issuer or a contract entered into more than two years before the date of the issue of this statement.

14.	Give particulars of any other material facts relating to the shares or debentures proposed to be offered and not disclosed pursuant to items 1 to 13.

15.	Give the last audited balance sheet of the issuer.

16.	Give a table or statement indicating —

(a)	the net asset backing per share of the issuer as at the date of the last audited accounts; and

(b)	the effect of the issue on the net asset backing per share.

*Delete where inapplicable.

”.

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