Companies (Amendment) Bill

Bill No. 46/1973

Read the first time on 25th July 1973.

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, 1973, and shall come into operation on such date as the Minister may, by notification in the Gazette, appoint.

Amendment of section 6A

2. Subsection (1) of section 6A of the Companies Act is hereby amended by inserting immediately after the expression “Part IV” appearing therein the expression “and sections 134 and 135”.

Amendment of section 35

3. Section 35 of the Companies Act is hereby amended —

(a)

by deleting the words “the company and” appearing in the sixth and seventh lines of subsection (3) thereof; and

(b)

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

“(3A) Subsection (3) of this section shall not apply if the contract is entered into by a receiver and manager of any part of the undertaking of the company appointed under a power contained in any instrument or a liquidator of the company appointed in a voluntary winding up.

(3B) Any contract for the sale of all or substantially all of the undertaking or assets of the company entered into with a purchaser for value acting in good faith and without knowledge of any breach of subsection (3) of this section shall be valid and enforceable notwithstanding the breach of that subsection by an officer acting on behalf of the company.”.

New section 39A

4. The Companies Act is hereby amended by inserting immediately after section 39 thereof the following new section: —

“Exemption from requirements as to form and content of prospectus

39A.—(1) A person may apply to the Registrar in writing for an order of exemption from any requirements of this Act relating to the form and content of a prospectus, and the Registrar may make such an order either unconditionally or on such terms and conditions as he may think fit to impose.

(2) The Registrar shall not make an order under subsection (1) of this section unless he is of the opinion that compliance with the requirements in respect of which exemption has been applied for would be unduly burdensome.

(3) A prospectus shall be deemed to comply with all the requirements of this Act relating to the form and content of a prospectus if it is issued in compliance with an order made under subsection (1) of this section.”.

Amendment of section 69A

5. Section 69A of the Companies Act is hereby amended by deleting the expression “the Securities Industry Act, 1970” appearing at the end of paragraph (a) of subsection (2) thereof and the marginal reference “Act 61 of 1970.” thereto and substituting therefor the words “any written law relating to the securities industry”.

Amendment of section 69D

6. Section 69D of the Companies Act is hereby amended by deleting the word “fourteen” appearing in paragraph (b) of subsection (2) thereof and substituting therefor the word “seven”.

Amendment of section 69H

7. Section 69H of the Companies Act is hereby amended by deleting the word “fourteen” appearing in paragraph (b) of subsection (2) thereof and substituting therefor the word “seven”.

Amendment of section 69J

8. Section 69J of the Companies Act is hereby amended by deleting the word “fourteen” appearing in the fifth line of subsection (4) thereof and substituting therefor the word “seven”.

Repeal and re-enactment of section 132A

9. Section 132A of the Companies Act is hereby repealed and the following substituted therefor: —

“Dealings by officers in securities

132A.—(1) An officer, agent or employee of a corporation who in or in relation to a dealing in securities of the corporation by himself or any other person makes use to gain directly or indirectly an advantage for himself or any other person of specific confidential information acquired by virtue of his position as such officer, agent or employee which if generally known might reasonably be expected to affect materially the price of the subject-matter of the dealing on a stock exchange shall, in addition to any penalty imposed under subsection (8) of this section, be liable to a person for loss suffered by that person by reason of the payment by him or to him of a consideration in respect of the securities greater or lesser, as the case may be, than the consideration that would have been reasonable if the information had been generally known at the time of the dealing.

(2) An officer, agent or employee of a corporation is not liable under subsection (1) of this section to a person for any loss suffered by that person if that person knew or ought reasonably to have known of the information referred to in subsection (1) of this section before entering into the transaction relating to the dealing in securities of the corporation.

(3) An action for the recovery of the amount of a loss referred to in subsection (1) of this section shall not be commenced after the expiration of two years after the date of the completion of the dealing in securities in respect of which the loss was suffered.

(4) In this section —

“agent” includes a banker, solicitor, auditor, accountant or stockbroker of the corporation and any person who at any time within the preceding twelve months has been a banker, solicitor, auditor, accountant or stockbroker of the corporation;

“corporation” includes a corporation that is related to a corporation under section 6;

“dealing in securities in relation to a corporation” means a transaction relating to —

(a)	shares in, debentures of, or interests within the meaning of section 84 made available by the corporation or by a related corporation; or
(b)	rights or options in respect of the acquisition or disposal of such debentures or interests;

“officer” includes a person who at any time within the preceding twelve months was a director of the corporation.

(5) This section shall be extended to apply to an officer, agent or employee of a corporation who makes use to gain, directly or indirectly, an advantage for himself or any other person, of specific confidential information acquired by virtue of his position as such officer, agent or employee, regarding —

(a)	the possibility of a take-over offer or bid being made to another corporation by the corporation to which he belongs; or
(b)	the possibility of his corporation entering into a substantial commercial transaction with another corporation,

to deal in the securities of that corporation in the expectation that, if this information becomes generally known, the price of the securities of that other corporation on a stock exchange might be materially affected.

(6) A committee of a stock exchange which has been approved by the Minister pursuant to the provisions of any written law relating to the securities industry or any body, panel or council set up to advise the Minister on the securities industry may, and shall if so directed by the Minister, investigate any dealing in securities under this section and may in any such investigation summon any person to give evidence on oath or affirmation or produce any document or material necessary for the purpose of the investigation.

(7) The Minister may, for the protection of investors, by regulation restrict dealings either directly or indirectly in the securities of a corporation by an officer, agent or employee of the corporation in certain specified circumstances or during certain periods of a financial year of a corporation when such officer, agent or employee is, or is likely to be, in possession of special confidential information acquired in his capacity as an officer, agent or employee of the corporation and which if generally known might reasonably be expected to affect materially the price of the securities of that corporation on a stock exchange.

(8) An officer, agent or employee of a corporation who commits a breach of the provisions 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 five years or to a fine not exceeding thirty thousand dollars or to both such imprisonment and fine.”.

Repeal and re-enactment of section 134

10. Section 134 of the Companies Act is hereby repealed and the following substituted therefor: —

“Register of directors’ share-holdings

134.—(1) A company shall keep a register showing with respect to each director of the company particulars of —

(a)	shares in that company or in a related corporation, being shares of which the director is a registered holder or in which he has an interest and the nature and extent of that interest;
(b)	debentures of or participatory interests made available by the company or a related corporation which are held by the director or in which he has an interest and the nature and extent of that interest;
(c)	rights or options of the director or of the director and another person or other persons in respect of the acquisition or disposal of shares in the company or a related corporation; and
(d)	contracts to which the director is a party or under which he is entitled to a benefit, being contracts under which a person has a right to call for or to make delivery of shares in the company or in a related corporation.

(2) A company need not show, in its register with respect to a director, particulars of shares in a related corporation that is a wholly-owned subsidiary of the company or of another corporation.

(3) A company that is a wholly-owned subsidiary of another company shall be deemed to have complied with this section in relation to a director who is a director of that other company if the particulars required by this section to be shown in the register of the first-mentioned company with respect to the director are shown in the register of the second-mentioned company.

(4) For the purposes of subsections (2) and (3) of this section a company is a wholly-owned subsidiary of another company if none of the members of the first-mentioned company is a person other than —

(a)	the second-mentioned company;
(b)	a nominee of the second-mentioned company;
(c)	a subsidiary of the second-mentioned company being a subsidiary none of the members of which is a person other than the second-mentioned company or a nominee of the second-mentioned company; or
(d)	a nominee of such a subsidiary.

(5) A company shall within three days after receiving notice from a director under paragraph (a) of subsection (1) of section 135 enter in its register in relation to the director the particulars referred to in subsection (1) of this section including the number and description of shares, debentures, participatory interests, rights, options and contracts to which the notice relates and in respect of shares, debentures, participatory interests, rights or options acquired or contracts entered into after he became a director —

(a)

the price or other consideration for the transaction (if any) by reason of which an entry is required to be made under this section; and

(b)

the date of —

(i)	the agreement for the transaction or, if it is later, the completion of the transaction; or
(ii)	where there was no transaction, the occurrence of the event by reason of which an entry is required to be made under this section.

(6) A company shall, within three days after receiving a notice from a director under paragraph (b) of subsection (1) of section 135, enter in its register the particulars of the change referred to in the notice.

(7) A company is not, by reason of anything done under this section, to be taken for any purpose to have notice of or to be put upon inquiry as to the right of a person or in relation to a share in debenture of or participatory interest made available by the company.

(8) A company shall subject to this section keep its register at the registered office of the company and the register shall be open for inspection by a member of the company without charge and by any other person on payment for each inspection of a sum of three dollars or such lesser sum as the company requires.

(9) A person may request a company to furnish him with a copy of its register or any part thereof on payment in advance of a sum of one dollar or such lesser sum as the company requires for every one hundred words or part thereof required to be copied and the company shall send the copy to that person within twenty-one days or such longer period as the Registrar thinks fit after the day on which the request is received by the company.

(10) The Registrar may by notice in writing require a company to send to him within such time as may be specified in the notice a copy of its register or any part thereof.

(11) A company shall produce its register at the commencement of each annual general meeting of the company and keep it open and accessible during the meeting to all persons attending the meeting.

(12) It is a defence to a prosecution for failing to comply with subsection (1) or (5) of this section in respect of particulars relating to a director if the defendant proves that the failure was due to the failure of the director to comply with section 135 with respect to those particulars.

(13) In this section —

(a)	a reference to a participatory interest is a reference to an interest within the meaning of section 84; and
(b)	a reference to a person who holds or acquires shares, debentures or participatory interests or an interest in shares, debentures or participatory interests includes a reference to a person who under an option holds or acquires a right to acquire or dispose of a share, debenture or participatory interest or an interest in a share, debenture or participatory interest.

(14) In determining for the purposes of this section whether a person has an interest in a debenture or participatory interest, the provisions of section 6A, except subsections (1) and (3) of that section, have effect and in applying those provisions a reference to a share shall be read as a reference to a debenture or participatory interest.

(15) For the purposes of the application of this section —

(a)

a director of a company shall be deemed to hold or have an interest or a right in or over any shares or debentures if a wife or husband of the director (not being herself or himself a director thereof) holds or has an interest or a right in or over any shares or debentures or an infant son or infant daughter of that director (not being himself or herself a director) holds or has an interest in shares or debentures; and

(b)

any contract, assignment or right of subscription exercised or made by or grant made to the wife or husband of a director of a company (not being herself or himself a director thereof) shall be deemed to have been entered into or exercised or made or, as the case may be, as having been made to the director; and so shall a contract, assignment or right of subscription entered into exercised or made by or grant made to an infant son or infant daughter of a director of a company (not being himself or herself a director thereof).

(16) In subsection (15) of this section, the word “son” includes step-son and adopted son and “daughter” includes step-daughter and adopted daughter.

(17) If default is made in complying with this section the company and every officer of the company who is in default 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 during which the offence is continued after conviction.”.

Repeal and re-enactment of section 135

11. Section 135 of the Companies Act is hereby repealed and the following substituted therefor: —

“General duty to make disclosure

135.—(1) A director of a company shall give notice in writing to the company —

(a)	of such particulars relating to shares, debentures, participatory interests, rights, options, and contracts as are necessary for the purposes of compliance by the first-mentioned company with the provisions of section 134;
(b)	of particulars of any change in respect of the particulars referred to in paragraph (a) of this subsection of which notice has been given to the company including the consideration (if any) received as a result of the event giving rise to the change;
(c)	of such events and matters affecting or relating to himself as are necessary for the purposes of compliance by the company with any of the provisions of section 141 that are applicable in relation to him; and
(d)	if he is a director of a public company or of a subsidiary of a public company of the date when he attained or will have attained the age of seventy years.

(2) A notice under subsection (1) of this section shall be given —

(a)

in the case of a notice under paragraph (a) of that subsection, within twenty-four hours after —

(i)	the commencement of the Companies (Amendment) Act, 1973;
(ii)	the date on which the director became a director; or
(iii)	the date on which the director became a registered holder of or acquired an interest in the shares, debentures, participatory interests, rights, options or contracts,

whichever last occurs;

(b)

in the case of a notice under paragraph (b) of that subsection, within twenty-four hours after the occurrence of the event giving rise to the change referred to in that paragraph; and

(c)

in the case of a notice under paragraph (d) of that subsection, within twenty-four hours after —

(i)	the commencement of the Companies (Amendment) Act, 1973; or
(ii)	the date on which the director became a director,

whichever last occurs.

(3) A company shall within seven days after it receives a notice given under subsection (1) of this section send a copy of the notice to each of the other directors of the company.

(4) It is a defence to a prosecution for failing to comply with paragraph (a) or (b) of subsection (1) of this section or with subsection (2) of this section if the defendant proves that his failure was due to his not being aware of a fact or occurrence the existence of which was necessary to constitute the offence and that —

(a)	he was not so aware on the date of the information or summons;
(b)	he became so aware less than seven days before the date of the information or summons; or
(c)	he became so aware not less than seven days before the date of the information or summons and gave the notice under the relevent subsection within seven days after becoming so aware.

(5) For the purposes of subsection (4) of this section a person shall conclusively be presumed to have been aware at a particular time of a fact or occurrence —

(a)

of which he would, if he had acted with reasonable diligence in the conduct of his affairs, have been aware at that time; or

(b)

of which a servant or agent of the person, being a servant or agent having duties or acting in relation to his master’s or principal’s interest or interests in a share in or a debenture of or participatory interest issued by the company concerned, was aware or would, if he had acted with reasonable diligence in the conduct of his master’s or principal’s affairs, have been aware at that time.

(6) In this section —

(a)	a reference to a participatory interest is a reference to an interest within the meaning of section 84; and
(b)	a reference to a person who holds or acquires shares, debentures or participatory interests or an interest in shares, debentures or participatory interests includes a reference to a person who under an option holds or acquires a right to acquire a share, debenture, or participatory interest or an interest in a share, debenture or participatory interest.

(7) In determining for the purposes of this section whether a person has an interest in a debenture or participatory interest, the provisions of section 6A, except subsections (1) and (3) of that section, have effect and in applying those provisions a reference to a share shall be read as a reference to a debenture or participatory interest.

(8) Nothing in section 134 or this section requires a company to enter in its register or requires a director to give notice to the company of matters that are shown in the register kept by the company in accordance with the repealed section 134 as in force immediately before the commencement of the Companies (Amendment) Act, 1973.

(9) Any director who fails to comply with subsection (1) or (2) of this section or any company that fails to comply with subsection (3) 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 during which the offence is continued after conviction.”.

Amendment of section 169

12. Section 169 of the Companies Act is hereby amended —

(a)	by inserting immediately after the word “year” appearing at the end of subsection (5) thereof the words “and if the company is a holding company also a report with respect to the state of affairs of the holding company and all its subsidiaries”;
(b)	by deleting the expression “; and” appearing at the end of paragraph (b) of subsection (12) thereof and substituting therefor a full-stop;
(c)	by deleting paragraph (c) of subsection (12) thereof;
(d)	by deleting the expression “(8)” appearing in the first line of subsection (13) thereof and substituting therefor the expression “(11)”; and
(e)	by deleting the expression “(14)” appearing in the sixth line of subsection (18) thereof and substituting therefor the expression “(17)”.

Repeal and re-enactment of section 174

13. Section 174 of the Companies Act is hereby repealed and the following substituted therefor: —

“Powers and duties of auditors as to reports on accounts

174.—(1) An auditor of a company shall report to the members on the accounts required to be laid before the company in general meeting and on the company’s accounting and other records relating to those accounts and if it is a holding company for which consolidated accounts are prepared shall also report to the members on the consolidated accounts.

(2) An auditor shall, in a report under this section, state —

(a)

whether the accounts and, if the company is a holding company for which consolidated accounts are prepared, the consolidated accounts are in his opinion properly drawn up —

(i)	so as to give a true and fair view of the matters required by section 169 to be dealt with in the accounts and, if there are consolidated accounts, in the consolidated accounts; and
(ii)	in accordance with the provisions of this Act so as to give a true and fair view of the company’s affairs;

(b)

whether the accounting and other records and the registers required by this Act to be kept by the company and, if it is a holding company, by the subsidiaries other than those of which he has not acted as auditor have been, in his opinion, properly kept in accordance with the provisions of this Act;

(c)

in the case of consolidated accounts —

(i)	the names of the subsidiaries (if any) of which he has not acted as auditor;
(ii)	whether he has considered the accounts and auditor’s reports of all subsidiaries of which he has not acted as auditor, being accounts that are included (whether separately or consolidated with other accounts) in the consolidated accounts;
(iii)	whether he is satisfied that the accounts of the subsidiaries that are consolidated with other accounts are in form and content appropriate and proper for the purposes of the preparation of the consolidated accounts, and whether he has received satisfactory information and explanations as required by him for those purposes; and
(iv)	whether the auditor’s report on the accounts of any subsidiary was made subject to any qualification (other than a qualification that is not material in relation to the consolidated accounts), or included any comment made under subsection (3) of this section, and, if so, particulars of the qualification or comment;

(d)

any defect or irregularity in the accounts or consolidated accounts and any matter not set out in the accounts or consolidated accounts without regard to which a true and fair view of the matters dealt with by the accounts or consolidated accounts would not be obtained; and

(e)

if he is not satisfied as to any matter referred to in paragraph (a), (b) or (c) of this subsection, his reasons for not being so satisfied.

(3) It is the duty of an auditor of a company to form an opinion as to each of the following matters: —

(a)	whether he has obtained all the information and explanations that he required;
(b)	whether proper accounting and other records (including registers) have been kept by the company as required by this Act;
(c)	whether the returns received from branch offices of the company are adequate; and
(d)	whether the procedures and methods used by a holding company or a subsidiary in arriving at the amounts taken into any consolidated accounts were appropriate to the circumstances of the consolidation,

and he shall state in his report particulars of any deficiency, failure or short-coming in respect of any matter referred to in this subsection.

(4) An auditor of a company has a right of access at all times to the accounting and other records (including registers) of the company, and is entitled to require from any officer of the company and any auditor of a related company such information and explanations as he desires for the purposes of audit.

(5) An auditor of a holding company for which consolidated accounts are required has a right of access at all times to the accounting and other records (including registers) of any subsidiary, and is entitled to require from any officer or auditor of any subsidiary, at the expense of the holding company, such information and explanations in relation to the affairs of the subsidiary as he requires for the purpose of reporting on the consolidated accounts.

(6) The auditor’s report shall be attached to or endorsed on the accounts or consolidated accounts and shall, if any member so requires, be read before the company in general meeting, and is open to inspection by any member at any reasonable time.

(7) An auditor of a company or his agent authorised by him in writing for the purpose is entitled to attend any general meeting of the company and to receive all notices of, and other communications relating to, any general meeting which a member is entitled to receive, and to be heard at any general meeting which he attends on any part of the business of the meeting which concerns the auditor in his capacity as auditor.

(8) If an auditor, in the course of the performance of his duties as auditor of a company, is satisfied that —

(a)	there has been a breach or nonobservance of any of the provisions of this Act; and
(b)	the circumstances are such that in his opinion the matter has not been or will not be adequately dealt with by comment in his report on the accounts or consolidated accounts or by bringing the matter to the notice of the directors of the company or, if the company is a subsidiary, of the directors of its holding company,

he shall forthwith report the matter in writing to the Registrar.

(9) An officer of a corporation who refuses or fails without lawful excuse to allow an auditor of the corporation or an auditor of a corporation who refuses or fails without lawful excuse to allow an auditor of its holding company access, in accordance with this section, to any accounting and other records (including registers) of the corporation in his custody or control, or to give any information or explanation as and when required under this section, or otherwise hinders, obstructs or delays an auditor in the performance of his duties or the exercise of his powers, shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding one thousand dollars.

Auditors and other persons to enjoy qualified privilege in certain circumstances

174A.—(1) An auditor shall not, in the absence of malice on his part, be liable to any action for defamation at the suit of any person in respect of any statement which he makes in the course of his duties as auditor, whether the statement is made orally or in writing.

(2) A person shall not in the absence of malice on his part be liable to any action for defamation at the suit of any person in respect of the publication of any document prepared by an auditor in the course of his duties and required by or under this Act to be lodged with the Registrar.

(3) This section does not limit or affect any other right, privilege or immunity that an auditor or other person has as defendant in an action for defamation.”.

Amendment of section 179

14. Section 179 of the Companies Act is hereby amended —

(a)

by deleting the expression “one-third” appearing in the eighth line of paragraph (b) of the definition of “take-over scheme” in subsection (1) thereof and substituting therefor the words “twenty per cent”;

(b)

by deleting the words “or both” appearing in the second line of subsection (10) thereof and substituting therefor the expression “or the body, panel or committee that is specified in the notice referred to in subsection (11) of this section, or all of them”; and

(c)

by inserting immediately after subsection (10) thereof the following new subsection: —

“(11) For the more effective administration, supervision and control of take-overs and mergers the Minister may if he thinks it necessary in the public interest or for the protection of investors by notice direct, from such date as may be specifed in the notice, that —

(a)	all parties concerned in a take-over or merger transaction shall, in addition to complying with the provisions of this section and the Tenth Schedule, be bound to abide by such general principles and rules of a nonstatutory nature as he may specify in the notice; and
(b)	such body, panel or committee as the Minister may designate in the notice shall administer and enforce those general principles and rules.”.

Amendment of section 208

15. Section 208 of the Companies Act is hereby amended by inserting immediately after subsection (4) thereof the following new subsections: —

“(5) The Minister may by notification in the Gazette delegate his powers under this section either generally or in any particular case to a committee of a stock exchange that has been approved by him under any written law relating to the securities industry or to any body, panel or committee that has been established to advise him on matters connected with the securities industry.

(6) A committee of a stock exchange or any body, panel or committee referred to in subsection (5) of this section in the discharge of its powers under that subsection shall keep the Minister informed of any information obtained under this section.

(7) Notwithstanding any delegation of his powers under this section the Minister may exercise any of the powers conferred upon him under this section.”.

Amendment of section 217

16. Subsection (1) of section 217 of the Companies Act is hereby amended by inserting immediately after the expression “(d)” appearing in the second line of paragraph (e) thereof the expression “or (l)”.

Amendment of section 218

17. Subsection (1) of section 218 of the Companies Act is hereby amended —

(a)

by deleting the word “or” appearing at the end of paragraph (j) thereof;

(b)

by deleting the full-stop appearing at the end of paragraph (k) thereof and substituting therefor the expression “; or”; and

(c)

by inserting immediately after paragraph (k) thereof the following new paragraph: —

“(l)	the company has carried on multi-level marketing or pyramid selling in contravention of any written law that prohibits multi-level marketing or pyramid selling.”.

Repeal and re-enactment of Division 1 of Part XI

18. Division 1 of Part XI of the Companies Act is hereby repealed and the following substituted therefor: —

“Division 1 — Investment Companies

Interpretation

319.—(1) In this Division, unless inconsistent with the context or subject-matter —

“investment company” means a corporation (not being a private company) for the time being declared by proclamation of the Minister to be an investment company;

“net tangible assets” means tangible assets at book values less total liabilities at book values and less any aggregate amount by which the book value of the marketable securities held by the corporation exceeds their market value.

[Aust. s. 334.]

Proclamation of investment companies

(2) The Minister may by proclamation published in the Gazette declare to be an investment company any corporation which is engaged primarily in the making of investments in marketable securities for the purpose of revenue and for profit and not for the purpose of exercising control, and the Minister may by like proclamation revoke any proclamation declaring a corporation to be an investment company.

Restriction on borrowing by investment companies

320. An investment company shall not borrow an amount if that amount, or the sum of that amount and amounts previously borrowed by it and not repaid, exceeds an amount equivalent to twice its net tangible assets.

[Aust. s. 335.]

Restriction on investments of investment companies

321.—(1) An investment company shall not invest an amount in a corporation if that amount, or the sum of that amount and amounts previously invested by it in that corporation and still so invested, exceeds an amount equivalent to ten per cent of the net tangible assets of the investment company.

[Aust. s. 336.]

(2) An investment company shall not invest an amount in the ordinary shares of a corporation if that amount, or the sum of that amount and amounts previously invested by it in the ordinary shares of that corporation and still so invested, exceeds an amount equivalent to ten per cent of the subscribed ordinary share capital of the corporation.

(3) Subsection (2) of this section shall not apply in respect of a wholly-owned subsidiary of an investment company for the purpose of carrying out nominee, underwriting, dealing or other functions incidental to the business of an investment company.

Restriction on underwriting by investment companies

322.—(1) An investment company shall not underwrite any issue of securities to an amount that, when added to the amount or amounts, if any, to which it has previously underwritten a current issue or issues of other securities (not being an amount or amounts in respect of which the underwriting obligation has been discharged), exceeds an amount equivalent to forty per cent of its net tangible assets.

[Aust. s. 337.]

Provisions for unloading securities underwritten and not taken up

(2) Where —

(a)	an investment company has underwritten any issue of securities and, in relation to the underwriting, has not contravened subsection (1) of this section; and
(b)	the investment company, as a result of the underwriting, invests in a corporation, being an investment contrary to section 321,

the investment company shall be deemed not to have contravened a provision of that section by reason of so investing in the corporation if, at the expiration of twelve months after so investing —

(c)	the amount invested by it in the corporation does not exceed an amount equivalent to ten per cent of the net tangible assets of the investment company; and
(d)	it does not hold more than ten per cent of the subscribed ordinary share capital of the corporation.

(3) This section extends to and in relation to sub-underwriting as if the sub-underwriting were underwriting.

Special requirements as to articles and prospectus

323. An investment company shall not issue a prospectus or permit a prospectus to be issued on its behalf unless the prospectus specifies —

(a)	the type of security in which it is among the objects of the company to invest; and
(b)	whether it is among the objects of the company to invest within Singapore or outside Singapore or both.

[Aust. s. 338.]

Not to hold shares in other investment companies

324. No investment company shall purchase or after the expiration of three years after it is declared to be an investment company hold any shares in or debentures of —

(a)	any other investment company; or
(b)	any corporation incorporated outside Singapore which is engaged primarily in the making of investments in marketable securities for the purpose of revenue and for profit and not for the purpose of exercising control and which is specified by proclamation of the Minister.

[Aust. s. 339.]

Not to speculate in commodities

325.—(1) No investment company shall for the purpose of profit buy or sell or deal in any raw materials or manufactured goods, whether in existence or not, otherwise than by investing in companies trading in such materials or goods.

[Aust. s. 340.]

(2) Subsection (1) of this section shall not apply to or in relation to —

(a)	any buying, selling or dealing by an investment company in pursuance of a contract entered into by the investment company before it was declared to be an investment company; or
(b)	the selling of or the dealing in raw materials or manufactured goods acquired by the investment company before it was so declared.

Balance-sheets and accounts

326.—(1) An investment company shall attach to its balance-sheet a complete list of all the investments of the company as at the date of the balance-sheet showing the descriptions and quantities of such investments.

[Aust. s. 341.]

(2) An investment company shall show separately in the profit and loss account, in addition to any other matters required to be shown therein, income from underwriting (including sub-underwriting).

Investment fluctuation reserve

327. The net profits and losses of an investment company from the purchase and sale of securities shall be respectively credited and debited by the company to a reserve account to be kept by it and to be called the “investment fluctuation reserve”.

[Aust. s. 342.]

Penalties

328.—(1) If default is made by an investment company in complying with the provisions of this Division the investment company and every officer of the investment company who is in default shall be guilty of an offence under this Act and shall be liable on conviction to imprisonment for a term not exceeding two years or to a fine not exceeding five thousand dollars and also to a default penalty not exceeding five hundred dollars.

[Aust. s. 343.]

(2) No transaction entered into by the company shall be invalid by reason only of such default.”.

Amendment of section 364A

19. Subsection (1) of section 364A of the Companies Act is hereby amended by deleting the word “prescribed” appearing in the first line of paragraph (c) thereof.

New section 374

20. The Companies Act is hereby amended by inserting immediately after section 373 thereof the following new section: —

“Amendment of Second Schedule

374. The Minister may, by notification in the Gazette, add to, vary or amend the fees to be paid under the Second Schedule.”.

Amendment of Tenth Schedule

21. The Tenth Schedule to the Companies Act is hereby amended by inserting immediately after paragraph 4 of Part A thereof the following new paragraph: —

“5. Every offer document shall contain the following words which are to be displayed prominently in that document: —

“If you are in any doubt about this offer you should consult your stockbroker, bank manager, solicitor or other professional adviser.””.

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