Companies (Amendment) Bill

Bill No. 9/1986

Read the first time on 31st March 1986.
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 1986 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 semi-colon at the end of the definition of “debenture” and by inserting the following “, but does not include —
(a)a document that merely acknowledges the receipt of money by a corporation in a case where in respect of the money, the corporation issues, in compliance with section 44, a document prescribed by subsection (2) of that section and complies with the requirements of that section;
(b)a document issued or executed by a banking corporation in the ordinary course of its banking business being a document that evidences or acknowledges indebtedness of the corporation arising in the ordinary course of that business;
(c)a cheque, order for the payment of money or bill of exchange;
(d)a promissory note having a face value of not less than $100,000;
(e)for the purposes of the application of this definition to a provision of this Act in respect of which any regulations made thereunder provide that the word “debenture” does not include a prescribed document or a document included in a prescribed class of documents, that document or a document included in that class of documents, as the case may be;”;
(b)by deleting the definition of “exempt private company” and substituting the following definition:
“ “exempt private company” means —
(a)a private company in the shares of which no beneficial interest is held directly or indirectly by any corporation and which has not more than 20 members; or
(b)any private company, being a private company that is wholly owned by the Government, which the Minister in the national interest, declares by notification in the Gazette to be an exempt private company;”;
(c)by inserting, immediately after the definition of “limited company”, the following definition:
“ “listed company” means a corporation that has been admitted to the official list of a stock exchange in Singapore and has not been removed from that official list;”;
(d)by inserting, immediately after the word “director,” in paragraph (a) of the definition of “officer”, the words “executive officer,”;
(e)by inserting, immediately after the word “means” in the definition of “preference share”, the words “, subject to section 180(2),”;
(f)by inserting, immediately after the word “prospectus,” in the definition of “prospectus”, the words “(including an abridged prospectus registered pursuant to section 47)”;
(g)by deleting the definition of “trustee corporation” and substituting the following definition:
“ “trustee corporation” means —
(a)a company registered as a trust company under the Trust Companies Act (Cap. 207); or
(b)a corporation, other than a trust company referred to in paragraph (a), that is a public company under this Act or under the laws of any other country which has been declared by the Minister to be a trustee corporation for the purposes of this Act;”;
(h)by deleting the definition of “unit” and substituting the following definition:
“ “unit”, in relation to a share, debenture or other interest, means any right or interest, whether legal or equitable, in the share, debenture or other interest, by whatever name called and includes any option to acquire any such right or interest in the share, debenture or other interest;”;
(i)by deleting the words “Division 4” in the penultimate line of subsection (5) and substituting the words “Division 5”; and
(j)by inserting, immediately after subsection (7), the following subsections:
As to what constitutes the affairs of a corporation
(8)  A reference in this Act to the affairs of a corporation shall, unless the contrary intention appears, be construed as including a reference to —
(a)the promotion, formation, membership, control, business, trading, transactions and dealings (whether alone or jointly with another person or other persons and including transactions and dealings as agent, bailee or trustee), property (whether held alone or jointly with another person or other persons and including property held as agent, bailee or trustee), liabilities (including liabilities owed jointly with another person or other persons and liabilities as trustee), profits and other income, receipts, losses, outgoings and expenditure of the corporation;
(b)in the case of a corporation (not being a trustee corporation) that is a trustee (but without limiting the generality of paragraph (a), matters concerned with the ascertainment of the identity of the persons who are beneficiaries under the trust, their rights under the trust and any payments that they have received, or are entitled to receive, under the terms of the trust;
(c)the internal management and proceeding of the corporation;
(d)any act or thing done (including any contract made and any transaction entered into) by or on behalf of the corporation, or to or in relation to the corporation or its business or property, at a time when —
(i)a receiver, or a receiver and manager, is in possession of, or has control over, property of the corporation;
(ii)a compromise or arrangement made between the corporation and another person or other persons is being administered; or
(iii)the corporation is being wound up,
and, without limiting the generality of the foregoing, any conduct of such a receiver or such a receiver and manager, of any person administering such a compromise or arrangement or of any liquidator or provisional liquidator of the corporation;
(e)the ownership of shares in, debentures of, and interests issued by, the corporation;
(f)the power of persons to exercise, or to control the exercise of, the rights to vote attached to shares in the corporation or to dispose of, or to exercise control over the disposal of, such shares;
(g)matters concerned with the ascertainment of the persons who are or have been financially interested in the success or failure, or apparent success or failure, of the corporation or are or have been able to control or materially to influence the policy of the corporation;
(h)the circumstances under which a person acquired or disposed of, or became entitled to acquire or dispose of, shares in, debentures of, or interests issued by, the corporation;
(i)where the corporation has issued interests, any matters concerning the financial or business undertaking, scheme, common enterprise or investment contract to which the interests relate; and
(j)matters relating to or arising out of the audit of, or working papers or reports of an auditor concerning, any matters referred to in any of the preceding paragraphs.
(9)  For the purposes of this Act wherever a reference to the affairs of a company or a foreign company appears it shall be construed as including a reference to the affairs of a corporation as defined in subsection (8).”.
New sections 5A and 5B
3.  The Companies Act is amended by inserting, immediately after section 5, the following sections:
Definition of ultimate holding company
5A.  For the purpose of this Act, a corporation is the ultimate holding company of another corporation if —
(a)the other corporation is a subsidiary of the first-mentioned corporation; and
(b)the first-mentioned corporation is not itself a subsidiary of any corporation.
Definition of wholly owned subsidiary
5B.  For the purpose of this Act, a corporation is a wholly owned subsidiary of another corporation if none of the members of the first-mentioned corporation is a person other than —
(a)that other corporation;
(b)a nominee of that other corporation;
(c)a subsidiary of that other corporation being a subsidiary none of the members of which is a person other than that other corporation or a nominee of that other corporation; or
(d)a nominee of such subsidiary.”.
Amendment of section 8
4.  Section 8 of the Companies Act is amended —
(a)by deleting the words “clerks and servants” in the third line of subsection (1) and substituting the words “or such other officers and employees”;
(b)by deleting subsections (5) to (11), and by renumbering subsections (12) and (13) as subsections (5) and (6) respectively; and
(c)by inserting, immediately after subsection (6) as renumbered, the following subsection:
(7)  The Minister may by notification in the Gazette add to, vary or amend the Eighth Schedule in relation to the contents and form of the annual return of a company having a share capital.”.
New sections 8A to 8H
5.  The Companies Act is amended by inserting, immediately after section 8, the following sections:
Inspection of books of corporation
8A.—(1)  Where the Minister is satisfied that there is good reason for so doing, he may at any time —
(a)give directions to a corporation requiring that corporation at such place and time as may be specified in the directions to produce such books relating to the affairs of a corporation as may be so specified; or
(b)authorise any person (referred to in this section and sections 8B and 8C as an authorised person), on producing (if required so to do) evidence of his authority to require that corporation to produce to him any books relating to the affairs of a corporation which the authorised person may specify.
(2)  Where by virtue of subsection (1) the Minister or an authorised person has power to require the production of any books from a corporation relating to the affairs of a corporation the Minister or that authorised person shall have the like power to require production of those books from any person who appears to the Minister or authorised person to be in possession of them; but where any such person claims a lien on both books produced by him, the production shall be without prejudice to the lien.
(3)  Any power conferred by this section to require a corporation or other person to produce books relating to the affairs of a corporation shall include power —
(a)if the books are produced —
(i)to make copies of, or take extracts from, them; and
(ii)to require that person who is a present or past officer of, or is or was at any time employed by the corporation to provide an explanation of any of them;
(b)if the books are not produced, to require the person required to produce them to state to the best of his knowledge and belief, where they are.
(4)  A statement made by a person in compliance with a requirement imposed by this section may be used in evidence against him.
(5)  A power conferred by this section to make a requirement of a person extends if the person is a body corporate, including a body corporate that is in the course of being wound up, or was a body corporate, being a body corporate that has been dissolved, to making that requirement of any person who is or has been an officer of the body corporate.
(6)  If a requirement to produce books relating to the affairs of a corporation or provide an explanation or make a statement which is imposed by virtue of this section is not complied with, the corporation or other person on whom the requirement was imposed shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $2,000 or to imprisonment for a term not exceeding 6 months or to both.
(7)  Where a person is charged with an offence under subsection (6) in respect of a requirement to produce any books relating to the affairs of a corporation it shall be a defence to prove that they were not in his possession or under his control or that it was not reasonably practicable for him to comply with the requirement.
(8)  A person, who in purported compliance with a requirement imposed by the section to provide an explanation or statement which he knows to be false or misleading in a material particular or recklessly provides or makes an explanation or statement which is false or misleading in a material particular, shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $20,000 or to imprisonment for a term not exceeding 2 years or to both.
Power of Magistrate to issue warrant to seize books
8B.—(1)  If a Magistrate is satisfied, on information on oath or affirmation laid by an authorised person, that there are reasonable grounds for suspecting that there are on any premises any books of which production has been required by virtue of section 8A and which have not been produced in compliance with that requirement, the Magistrate may issue a warrant authorising any police officer, together with any other persons named in the warrant, to enter the premises specified in the information (using such force as is reasonably necessary for the purpose) and to search the premises and take possession of any books appearing to be such books or papers as are referred to in this subsection, or to take, in relation to any books so appearing, any other steps which may appear necessary for preserving them and preventing interference with them and to deliver any books, possession of which is so taken, to an authorised person.
(2)  Every warrant issued under this section shall continue in force until the end of the period of one month after the date on which it was issued.
(3)  Where under this section a person takes possession of, or secures against interference, any books, and a person has a lien on the books, the taking of possession of the books or the securing of the books against interference does not prejudice the lien.
(4)  Where, under this section, a person takes possession of, or secures against interference, any books, that person or any authorised person to whose possession the books were delivered —
(a)may make copies of, or take extracts from, the books;
(b)may require any person who was party to the compilation of the books to make a statement providing any explanation that that person is able to provide as to any matter relating to the compilation of the books or as to any matter to which the books relate;
(c)may retain possession of the books for such period as is necessary to enable the books to be inspected, and copies of, or extracts from, the books to be made or taken, by or on behalf of the Minister; and
(d)during that period shall permit a person who would be entitled to inspect any one or more of those books if they were not in the possession of the first-mentioned person to inspect at all reasonable times such of those books as that person would be so entitled to inspect.
(5)  A person who obstructs the exercise of a right of entry or search conferred by virtue of a warrant issued under this section, or who obstructs the exercise of a right so conferred to take possession of any books, shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $2,000 or to imprisonment for a term not exceeding 6 months or to both.
(6)  The powers conferred by this section are in addition to, and not in derogation of, any other power conferred by law.
Copies or extracts of books to be admitted in evidence
8C.—(1)  Subject to this section, in any legal proceedings, whether proceedings under this Act or otherwise, a copy of or extract from a book relating to affairs of a corporation is admissible in evidence as if it were the original book or the relevant part of the original book.
(2)  A copy of or extract from a book is not admissible in evidence under subsection (1) unless it is proved that the copy or extract is a true copy of the book or of the relevant part of the book.
(3)  For the purposes of subsection (2), evidence that a copy of or extract from a book is a true copy of the book or of a part of the book may be given by a person who has compared the copy or extract with the book or the relevant part of the book and may be given either orally or by an affidavit sworn, or by a declaration made, by a person authorised to take affidavits or statutory declarations.
Destruction, mutilation, etc. of company documents
8D.—(1)  An officer of a corporation to which section 8A(1) applies, who destroys, mutilates or falsifies, or is privy to the destruction, mutilation or falsification of a document affecting or relating to the property or affairs of the corporation, or makes or is privy to the making of a false entry in such a document, shall, unless he proves that he had no intention to conceal the affairs of the corporation or to defeat the law, be guilty of an offence.
(2)  A person to whom subsection (1) applies who fraudulently either parts with, alters or makes an omission in any such document, or who is privy to fraudulent parting with, fraudulent altering or fraudulent making of an omission in, any such document, shall be guilty of an offence.
(3)  A person guilty of an offence under this section shall be liable on conviction to a fine not exceeding $10,000 or to imprisonment for a term not exceeding 2 years or to both.
(4)  In this section, “officer of a corporation” includes a person who —
(a)was at any time an officer of the corporation; or
(b)has, or had, a financial or other interest in the affairs of the corporation.
Saving for advocates and solicitors
8E.  Nothing in sections 8A and 8B shall compel the production by an advocate and solicitor of a document containing a privileged communication made by or to him in that capacity or authorise the taking of possession of any such document which is in his possession but if the advocate and solicitor refuses to produce the document he shall nevertheless be obliged to give the name and address (if he knows them) of the person to whom or by or on behalf of whom the communication was made.
Investigation of certain matters
8F.  Without prejudice to the powers conferred upon the Minister under section 8A, where the Minister has reason to suspect that a person has committed an offence under this Act, he may make such investigation as he thinks expedient for the due administration of this Act.
Savings for banks, insurance companies and certain financial institutions
8G.  Nothing in section 8A shall authorise the Minister to call for the production of books of a banking corporation or of any company carrying on insurance business or of any financial institution that is subject to control by the Monetary Authority of Singapore under sections 24B and 24C of the Monetary Authority of Singapore Act (Cap. 195) and nothing in section 8F shall authorise the Minister to conduct an investigation into any such corporation, company or financial institution.
Security of information
8H.—(1)  No information or document relating to the affairs of a corporation which has been obtained under section 8A or 8B shall, without the previous consent in writing of that corporation, be published or disclosed, except to the Minister, the Registrar of Companies and their officers or to an inspector appointed under Part IX, unless the publication or disclosure is required —
(a)with a view to the institution of or otherwise for the purposes of, any criminal proceedings pursuant to, or arising out of this Act or any criminal proceedings for an offence entailing misconduct in connection with the management of the corporation’s affairs or misapplication or wrongful retention of its property;
(b)for the purpose of complying with any requirement or exercising any power imposed or conferred by this Act in connection with reports made by inspectors appointed under Part IX;
(c)with a view to the institution by the Minister of proceedings for the winding up of companies under this Act of the corporation; or
(d)for the purpose of proceedings under section 8A or 8B.
(2)  A person who publishes or discloses any information or document in contravention of this section 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 or to both.”.
New sections 12A and 12B
6.  The Companies Act is amended by inserting, immediately after section 12, the following sections:
Electronic filing service
12A.—(1)  Where the Registry of Companies provides a service (to be called an Electronic Filing Service), whether before or after the commencement of this Act, for the use of subscribers, whereby documents required under this Act may be filed electronically with the Registry, neither the Government nor any of its employees shall be liable for any loss or damage, suffered by any person by reason of any errors or omissions, of whatever nature or however caused, appearing in any document obtained by any person under the Electronic Filing Service if such errors or omissions are made in good faith and in the ordinary course of the discharge of the duties of these employees or have occurred or arisen as a result of any defect or breakdown in the Electronic Filing Service or in any of the equipment used for the Electronic Filing Service.
Evidentiary value of copies of electronically filed documents certified by Registrar
(2)  A copy of or extract from any document electronically filed with the Registry of Companies under subsection (1) supplied or issued by the Registrar and certified to be a true copy or extract thereof under the hand and seal of the Registrar shall in any proceedings be admissible in evidence as of equal validity with the original document.
Certificate in respect of documents filed electronically
(3)  The Registrar may require a certificate, in respect of any document to be filed electronically, from the party filing the document certifying to the effect that any stamp fee payable for the document has been duly paid and that he has witnessed the signing and execution of the document or that the document has been duly signed and executed by the person concerned and that such signing or execution has been duly witnessed by a notary public or a solicitor or approved company auditor or a person with such other qualifications as may be prescribed for the purposes of this section. The Registrar may require the production of any document that has been signed and executed under this subsection.
Rectification of register
12B.—(1)  Where it appears to the Court, as a result of evidence adduced before it by an applicant company, that any particular recorded in a register is erroneous or defective, the Court may, by order, direct the Registrar to rectify the register on such terms and conditions as seem to the Court just and expedient, as are specified in the order and the Registrar shall, upon receipt of the order rectify the register accordingly.
(2)  An order of the Court made under subsection (1) shall require that a fresh document, showing the rectification, shall be filed by the applicant company with the Registrar together with a copy of the Court order, a copy of the court application and the affidavits in support thereof.”.
Amendment of section 27
7.  Section 27(2) of the Companies Act is amended by inserting, immediately after the figures “28,” in the second line, the words “other than subsection (4) thereof,”.
Amendment of section 41
8.  Section 41 of the Companies Act is amended —
(a)by inserting a marginal note against subsection (3) as follows:
Form of Contract.”;
(b)by deleting the word “company” wherever it appears in subsections (3) to (7) and substituting in each case the word “corporation”; and
(c)by inserting, immediately after subsection (7), the following subsections:
Authority of agent of a corporation need not be under seal, unless seal required by law of foreign state
(8)  The fact that a power of attorney or document of authorisation given to or in favour of the donee of the power or agent of a corporation is not under seal shall not, if such power of attorney or document of authorisation is valid as a power of attorney or document of authorisation in accordance with the laws of the country under which such corporation is incorporated, affect for any purpose intended to be effected in Singapore the validity or effect of any instrument under seal executed on behalf of that corporation by such donee of the power or agent, which shall for all such purposes whatsoever be as valid as if such authority had been under seal.
Retrospective application
(9)  Subsection (8) shall also apply to every instrument under seal executed before the commencement of the Companies (Amendment) Act 1986 on behalf of any corporation by a donee of a power or an agent of that corporation whose authority was not under seal.”.
Amendment of section 44
9.  Section 44 of the Companies Act is amended —
(a)by deleting the words “or proposed corporation” in the second and third lines of subsection (1); and
(b)by deleting subsection (6) and substituting the following subsection:
(6)  Nothing in this section applies to a prescribed corporation and nothing in this Act requires a prospectus to be issued in connection with —
(a)an invitation issued by a prescribed corporation to the public to subscribe for or purchase debentures of a prescribed corporation;
(b)an offer made by a prescribed corporation to the public of debentures of the prescribed corporation; or
(c)any invitation to lend money to or deposit money with a prescribed corporation.”.
Amendment of section 47
10.  Section 47 of the principal Act is amended —
(a)by deleting the word “corporation” wherever it appears in subsection (1) and substituting in each case the word “company”; and
(b)by deleting subsections (2) and (3) and substituting the following subsection:
(2)  Where subsection (1) applies to any offer or invitation with respect to shares or debentures of a company, an abridged prospectus shall be registered containing the particulars set out in Part V of the Fifth Schedule.”; and
(c)by inserting, immediately after subsection (4), the following subsection:
(5)  Nothing in this section shall be construed as preventing a full prospectus being registered containing the particulars set out in the Fifth Schedule (other than Part V thereof) in respect of an offer or invitation referred to in subsection (1).”.
Amendment of section 50
11.  Section 50 of the Companies Act is amended —
(a)by deleting subsection (2) and substituting the following subsection:
(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 the 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; and
(e)it appears to him that it is not in the interest of the investing public to do so.”; and
(b)by inserting, immediately after subsection (4), the following subsections:
(5)  The Registrar shall not refuse the registration of a prospectus under subsection (2)(e) unless he first affords the person who lodged the prospectus an opportunity of being heard.
(6)  Where the Registrar decides to refuse registration under subsection (2)(e) he shall give his reasons for so deciding to the person who lodged the prospectus within 14 days of his decision.
(7)  Any person who is aggrieved by the decision of the Registrar under subsection (6) may, within 30 days of the decision of the Registrar appeal to the Minister.
(8)  The decision of the Minister under subsection (7) shall be final and shall not be called in question in any court.”.
Amendment of section 66
12.  Section 66 is amended by inserting, immediately after subsection (1), the following subsection:
(1A)  For the purposes of this section, “share warrant” means a certificate, issued by a company under its common seal (if so authorised by its articles), with respect to fully paid up shares or stock of the company that states that the bearer of the warrant is entitled to the shares therein specified and which enables the shares to be transferred by delivery of the warrant.”.
New sections 69A to 69F
13.  The Companies Act is amended by inserting, immediately after section 69, the following sections:
Relief from section 69
69A.—(1)  Sections 69B, 69C and 69D give relief from the requirements of section 69 in the circumstances mentioned in this section.
(2)  The relief given by section 69B or 69C applies where a company issues or has issued shares in circumstances to which either of those sections applies and the issue takes place on or after 27th February 1986.
(3)  The relief given by section 69D applies only where a company has issued shares in circumstances to which that section applies before the date mentioned in subsection (2).
(4)  References in sections 69B, 69C and 69D to the issuing company are references to the company issuing the shares as mentioned in subsection (2) or (3).
Merger relief
69B.—(1)  Subject to section 69C, this section applies where the issuing company has secured at least a 90% equity holding in another company in pursuance of any arrangement providing for the allotment of equity shares in the issuing company on terms that the consideration for the shares allotted is to be provided by the issue or transfer to the issuing company of equity shares in that other company or by the cancellation of any such shares not held by the issuing company.
(2)  Where the equity shares in the issuing company allotted in pursuance of the arrangement in consideration for the acquisition or cancellation of equity shares in the other company are issued at a premium, section 69 shall not apply to the premiums on those shares.
(3)  Where the arrangement also provides for the allotment of any shares in the issuing company on terms that the consideration for those shares is to be provided by the issue or transfer to the issuing company of shares, which are non-equity shares, in the other company or by the cancellation of any such shares in that company not held by the issuing company, the relief from section 69 provided by subsection (2) shall extend to any shares in the issuing company allotted on those terms in pursuance of the arrangement.
(4)  Subject to subsection (5), the issuing company shall be regarded for the purposes of this section as having secured at least a 90% equity holding in another company in pursuance of any such arrangement as is mentioned in subsection (1) if in consequence of any acquisition or cancellation of equity shares in that company in pursuance of that arrangement it holds equity shares in that company (whether all or any of those shares were acquired in pursuance of that arrangement or not) of an aggregate nominal value equal to 90% or more of the nominal value of that company’s equity share capital.
(5)  Where the equity share capital of the other company in question is divided into different classes of shares this section shall not apply unless the requirements of subsection (1) are satisfied in relation to each of those classes taken separately.
(6)  Shares held by a company which is the issuing company’s holding company or subsidiary or a subsidiary of the issuing company’s holding company, or by its or their nominees, shall be regarded for the purposes of this section as held by the issuing company.
(7)  In this section —
“equity share capital”, in relation to a company, means its issued share capital excluding any part thereof which neither as respects dividends nor as respects capital, carries any right to participate beyond a specified amount in a distribution;
“equity shares” means shares comprised in a company’s equity share capital; and
“non-equity shares” means shares of any class that is not comprised in a company’s equity share capital.
Relief from section 69 in respect of group reconstruction
69C.—(1)  This section applies where the issuing company —
(a)is a wholly-owned subsidiary; and
(b)allots shares to the holding company or to another wholly-owned subsidiary of the holding company in consideration for the transfer to it of shares in another subsidiary (whether wholly-owned or not) of the holding company.
(2)  Where the shares in the issuing company allotted in consideration for the transfer are issued at a premium, the issuing company shall not be required by section 69 to transfer any amount in excess of the minimum premium value to the share premium account.
(3)  In subsection (2), “the minimum premium value” means the amount, if any, by which the base value of the shares transferred exceeds the aggregate nominal value of the shares allotted in consideration for the transfer.
(4)  For the purposes of subsection (3), the base value of the shares transferred shall be taken as —
(a)the cost of those shares to the company transferring them; or
(b)the amount at which those shares are stated in that company’s accounting records immediately before the transfer,
whichever is the lesser.
(5)  Section 69B shall not apply in any case to which this section applies.
Retrospective relief from section 69 in certain circumstances
69D.—(1)  Subject to section 69A(3) and subsection (2) of this section, this section applies where the issuing company has issued at a premium shares which were allotted in pursuance of any arrangement providing for the allotment of shares in the issuing company on terms that the consideration for the shares allotted was to be provided by the issue or transfer to the issuing company of shares in another company or by the cancellation of any shares in that other company not held by the issuing company.
(2)  The other company in question must either have been at the time of the arrangement a subsidiary of the issuing company or of any company which was then the issuing company’s holding company or have become such a subsidiary on the acquisition or cancellation of its shares in pursuance of the arrangement.
(3)  Any part of the premiums on the shares so issued which was not transferred to the company’s share premium account in accordance with section 69 shall be treated as if section 69 had never applied to those premiums (and may, accordingly, be disregarded in determining the sum to be included in the company’s share premium account).
Provisions supplementary to sections 69B and 69C
69E.—(1)  An amount corresponding to any amount representing the premiums or part of the premiums on shares issued by a company which by virtue of section 69B, 69C or 69D is not included in the company’s share premium account may also be disregarded in determining the amount at which any shares or other consideration provided for the shares issued is to be included in the company’s balance-sheet.
(2)  References in sections 69B, 69C and 69D and in this section (however expressed) to —
(a)the acquisition by any company of shares in another company; and
(b)the issue or allotment of shares to or the transfer of shares to or by any company,
include references respectively to the acquisition of any of those shares by and to the issue or allotment or (as the case may require) the transfer of any of those shares to, or by nominees of, that company; and the reference in section 69C(4)(a) to the company transferring the shares therein mentioned shall be construed accordingly.
(3)  References in sections 69B, 69C and 69D and in this section to the transfer of shares in a company include references to the transfer of a right to be included in the company’s register of members in respect of those shares.
(4)  In sections 69B and 69D, “arrangement” means any agreement, scheme or arrangement (including an arrangement sanctioned in accordance with section 210 or 306).
(5)  In sections 69B, 69C and 69D and in this section, “company”, except in references to the issuing company, includes a corporation.
Power to make provision extending or restricting relief from section 69
69F.—(1)  The Minister may, by regulations, make such provision as appears to him to be appropriate —
(a)for relieving companies from the requirements of section 69 in relation to premiums other than cash premiums; or
(b)for restricting or otherwise modifying any relief from the requirements provided by sections 69A to 69E.
(2)  Regulations made under this section may make different provision for different cases or classes of cases and may contain such incidental and supplementary provisions as the Minister thinks fit.”.
Repeal and re-enactment of section 76 and new section 76A
14.  Section 76 of the Companies Act is repealed and the following sections substituted therefor:
Company financing dealings in its shares, etc.
76.—(1)  Except as otherwise expressly provided by this Act, a company shall not —
(a)whether directly or indirectly, give any financial assistance for the purpose of, or in connection with —
(i)the acquisition by any person, whether before or at the same time as, the giving of financial assistance, of —
(A)shares or units of shares in the company; or
(B)shares or units of shares in a holding company of the company; or
(ii)the proposed acquisition by any person of —
(A)shares or units of shares in the company; or
(B)shares or units of shares in a holding company of the company; or
(b)whether directly or indirectly, in any way —
(i)acquire shares or units of shares in the company; or
(ii)purport to acquire shares or units of shares in a holding company of the company; or
(c)whether directly or indirectly, in any way, lend money on the security of —
(i)shares or units of shares in the company; or
(ii)shares or units of shares in a holding company of the company.
(2)  A reference in this section to the giving of financial assistance includes a reference to the giving of financial assistance by means of the making of a loan, the giving of a guarantee, the provision of security, the release of an obligation or the forgiving of a debt or otherwise.
(3)  For the purposes of this section, a company shall be taken to have given financial assistance for the purpose of an acquisition or proposed acquisition referred to in subsection (1)(a) (referred to in this subsection as the “relevant purpose”) if —
(a)the company gave the financial assistance for purposes that included the relevant purpose; and
(b)the relevant purpose was a substantial purpose of the giving of the financial assistance.
(4)  For the purposes of this section, a company shall be taken to have given financial assistance in connection with an acquisition or proposed acquisition referred to in subsection (1)(a) if, when the financial assistance was given to a person, the company was aware that the financial assistance would financially assist —
(a)the acquisition by a person of shares or units of shares in the company; or
(b)where shares in the company had already been acquired — the payment by a person of any unpaid amount of the subscription payable for the shares or of any premium payable in respect of the shares, or the payment of any calls on the shares.
(5)  If a company contravenes subsection (1), the company shall not be guilty of an offence, notwithstanding section 407, but each officer of the company who is in default shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $20,000 or to imprisonment for a term not exceeding 3 years or to both.
(6)  Where a person is convicted of an offence under subsection (5) and the court by which he is convicted is satisfied that the company or another person has suffered loss or damage as a result of the contravention that constituted the offence, that court may, in addition to imposing a penalty under that subsection, order the convicted person to pay compensation to the company or other person, as the case may be, of such amount as the court specifies, and any such order may be enforced as if it were a judgment of the court.
(7)  The power of a court under section 391 to relieve a person to whom that section applies, wholly or partly and on such terms as the court thinks fit, from a liability referred to in that section extends to relieving a person against whom an order may be made under subsection (6) from the liability to have such an order made against him.
(8)  Nothing in subsection (1) prohibits —
(a)the payment of a dividend by a company in good faith and in the ordinary course of commercial dealing;
(b)a payment made by a company pursuant to a reduction of capital in accordance with section 73;
(c)the discharge by a company of a liability of the company that was incurred in good faith as a result of a transaction entered into on ordinary commercial terms;
(d)anything done in pursuance of an order of court made under section 210;
(e)anything done under an arrangement made in pursuance of section 306;
(f)anything done under an arrangement made between a company and its creditors which is binding on the creditors by virtue of section 309;
(g)where a corporation is a borrowing corporation by reason that it is or will be under a liability to repay moneys received or to be received by it —
(i)the giving, in good faith and in the ordinary course of commercial dealing, by a company that is a subsidiary of the borrowing corporation, of a guarantee in relation to the repayment of those moneys, whether or not the guarantee is secured by any charge over the property of that company; or
(ii)the provision, in good faith and in the ordinary course of commercial dealing, by a company that is a subsidiary of the borrowing corporation, of security in relation to the repayment of those moneys;
(h)an acquisition by a company of an interest (other than a legal interest) in fully-paid shares in the company where no consideration is provided by the company, or by any corporation that is related to the company, for the acquisition;
(i)the purchase by a company of shares in the company pursuant to an order of a court;
(j)the creation or acquisition, in good faith and in the ordinary course of commercial dealing, by a company of a lien on shares in the company (other than fully-paid shares) for any amount payable to the company in respect of the shares; or
(k)the entering into, in good faith and in the ordinary course of commercial dealing, of an agreement by a company with a subscriber for shares in the company permitting the subscriber to make payments for the shares (including payments in respect of any premium) by instalments,
but nothing in this subsection —
(l)shall be construed as implying that a particular act of a company would, but for this subsection, be prohibited by subsection (1); or
(m)shall be construed as limiting the operation of any rule of law permitting the giving of financial assistance by a company, the acquisition of shares or units of shares by a company or the lending of money by a company on the security of shares.
(9)  Nothing in subsection (1) prohibits —
(a)the making of a loan, the giving of a guarantee or the provision of security by a company in the ordinary course of its ordinary business where the activities of that company are regulated by any written law relating to banking, finance companies or insurance or are subject to supervision by the Monetary Authority of Singapore and where —
(i)that business includes the lending of money, or the giving of guarantees or the provision of security in connection with loans made by other persons; and
(ii)the loan that is made by the company, or, where the guarantee is given or the security is provided in respect of a loan, that loan, is made on ordinary commercial terms as to the rate of interest, the terms of repayment of principal and payment of interest, the security to be provided and otherwise; or
(b)the giving by a company of financial assistance for the purpose of, or in connection with, the acquisition or proposed acquisition of fully-paid shares or units of fully-paid shares in the company or in a holding company of the company to be held by or for the benefit of employees of the company or of a corporation that is related to the company, including any director holding a salaried employment or office in the company or in the corporation, as the case may be, where —
(i)in the case where neither sub-paragraph (ii) nor sub-paragraph (iii) applies — the company has at a general meeting;
(ii)in a case where the company is a subsidiary of a listed corporation or listed corporations — the company and the listed corporation or listed corporations have at general meetings; or
(iii)in the case where the company is not a subsidiary of a listed corporation but is a subsidiary whose ultimate holding company is incorporated in Singapore — the company and the ultimate holding company have at general meetings,
approved a scheme for the provision of money for such acquisitions and the financial assistance is given in accordance with the scheme.
(10)  Nothing in subsection (1) prohibits the giving by a company of financial assistance for the purpose of, or in connection with, an acquisition or proposed acquisition by a person of shares or units in the company or in a holding company of the company if —
(a)the company, by special resolution, resolves to give financial assistance for the purpose of or in connection with, that acquisition;
(b)where —
(i)the company is a subsidiary of a listed corporation; or
(ii)the company is not a subsidiary of a listed corporation but is a subsidiary whose ultimate holding company is incorporated in Singapore,
the listed corporation or the ultimate holding company, as the case may be, has, by special resolution, approved the giving of the financial assistance;
(c)the notice specifying the intention to propose the resolution referred to in paragraph (a) as a special resolution sets out —
(i)particulars of the financial assistance proposed to be given and the reasons for the proposal to give that assistance; and
(ii)the effect that the giving of the financial assistance would have on the financial position of the company and, where the company is included in a group of corporations consisting of a holding company and a subsidiary or subsidiaries, the effect that the giving of the financial assistance would have on the financial position of the group of corporations,
and is accompanied by a copy of a statement made in accordance with a resolution of the directors, setting out the names of any directors who voted against the resolution and the reasons why they so voted, and signed by not less than two directors, stating whether, in the opinion of the directors who voted in favour of the resolution, after taking into account the financial position of the company (including future liabilities and contingent liabilities of the company), the giving of the financial assistance would be likely to prejudice materially the interests of the creditors or members of the company or any class of those creditors or members;
(d)the notice specifying the intention to propose the resolution referred to in paragraph (b) as a special resolution is accompanied by a copy of the notice, and a copy of the statement, referred to in paragraph (c);
(e)not later than the day next following the day when the notice referred to in paragraph (c) is dispatched to members of the company there is lodged with the Registrar a copy of that notice and a copy of the statement that accompanied that notice;
(f)the notice referred to in paragraph (c) and a copy of the statement referred to in that paragraph are sent to —
(i)all members of the company;
(ii)all creditors of the company;
(iii)all trustees for debenture holders of the company; and
(iv)if there are no trustees for, or for a particular class of, debenture holders of the company — all debenture holders, or all debenture holders of that class, as the case may be, of the company whose names are, at the time when the notice is dispatched, known to the company;
(g)the notice referred to in paragraph (d) and the accompanying documents are sent to —
(i)all members of the listed corporation or of the ultimate holding company;
(ii)all creditors of the company;
(iii)all trustees for debenture holders of the listed corporation or of the ultimate holding company; and
(iv)if there are no trustees for, or for a particular class of, debenture holders of the listed corporation or of the ultimate holding company — all debenture holders or debenture holders of that class, as the case may be, of the listed corporation or of the ultimate holding company whose names are, at the time when the notice is dispatched, known to the listed corporation or the ultimate holding company;
(h)within 21 days after the general meeting of the company at which the resolution referred to in paragraph (a) is passed or, in a case to which paragraph (b) applies, the general meeting of the listed corporation or ultimate holding company at which the resolution referred to in that paragraph is passed, whichever is the later, a notice —
(i)setting out the terms of the resolution referred to in paragraph (a); and
(ii)stating that any of the persons referred to in subsection (12) may, within the period referred to in that subsection, make an application to the Court opposing the giving of the financial assistance,
is published in a daily newspaper circulating generally in Singapore;
(i)no application opposing the giving of the financial assistance is made within the period referred to in subsection (12) or, if such an application or applications has or have been made, the application or each of the applications has been withdrawn or the Court has approved the giving of the financial assistance; and
(j)the financial assistance is given in accordance with the terms of the resolution referred to in paragraph (a) and not earlier than —
(i)in a case to which sub-paragraph (ii) does not apply — the expiration of the period referred to in subsection (12); or
(ii)if an application or applications has or have been made to the Court within that period —
(A)where the application or each of the applications has been withdrawn — the withdrawal of the application or of the last of the applications to be withdrawn; or
(B)in any other case — the decision of the Court on the application or applications.
(11)  Where, on application to the Court by a company, the Court is satisfied that the provisions of subsection (10) have been substantially complied with in relation to a proposed giving by the company of financial assistance of a kind mentioned in that subsection, the Court may, by order, declare that the provisions of that subsection have been complied with in relation to the proposed giving by the company of financial assistance.
(12)  Where a special resolution referred to in subsection (10)(a) is passed by a company, an application to the Court opposing the giving of the financial assistance to which the special resolution relates may be made, within the period of 21 days after the publication of the notice referred to in subsection (10)(h), —
(a)by a member of the company;
(b)by a trustee for debenture holders of the company;
(c)by a debenture holder of the company;
(d)by a creditor of the company;
(e)if the company is included in a group of corporations consisting of a holding company and a subsidiary or subsidiaries by —
(i)a member of that subsidiary or of any of those subsidiaries;
(ii)a trustee for debenture holders of that subsidiary or of any of those subsidiaries;
(iii)a debenture holder of that subsidiary or of any of those subsidiaries; or
(iv)a creditor of that subsidiary or of any of those subsidiaries;
(f)if subsection (10)(b) applies by —
(i)a member of the listed corporation or ultimate holding company that passed a special resolution referred to in that subsection;
(ii)a trustee for debenture holders of that listed corporation or ultimate holding company;
(iii)a debenture holder of that listed corporation or ultimate holding company; or
(iv)a creditor of that listed corporation or ultimate holding company; or
(g)by the Registrar.
(13)  Where an application or applications opposing the giving of financial assistance by a company in accordance with a special resolution passed by the company is or are made to the Court under subsection (12), the Court —
(a)shall, in determining what order or orders to make in relation to the application or applications, have regard to the rights and interests of the members of the company or of any class of them as well as to the rights and interests of the creditors of the company or of any class of them; and
(b)shall not make an order approving the giving of the financial assistance unless the Court is satisfied that —
(i)the company has disclosed to the members of the company all material matters relating to the proposed financial assistance; and
(ii)the proposed financial assistance would not, after taking into account the financial position of the company (including any future or contingent liabilities), be likely to prejudice materially the interests of the creditors or members of the company or of any class of those creditors or members,
and may do all or any of the following:
(c)if it thinks fit, make an order for the purchase by the company of the interests of dissentient members of the company and for the reduction accordingly of the capital of the company;
(d)if it thinks fit, adjourn the proceedings in order that an arrangement may be made to the satisfaction of the Court for the purchase (otherwise than by the company or by a subsidiary of the company) of the interests of dissentient members;
(e)give such ancillary or consequential directions and make such ancillary or consequential orders as it thinks expedient;
(f)make an order disapproving the giving of the financial assistance or, subject to paragraph (b), an order approving the giving of the financial assistance.
(14)  Where the Court makes an order under this section in relation to the giving of financial assistance by a company, the company shall, within 14 days after the order is made, lodge with the Registrar an office copy of the order.
(15)  The passing of a special resolution by a company for the giving of financial assistance by the company for the purpose of, or in connection with, an acquisition or proposed acquisition of shares or units of shares in the company, and the approval by the Court of the giving of the financial assistance, do not relieve a director of the company of any duty to the company under section 157 or otherwise, and whether of a fiduciary nature or not, in connection with the giving of the financial assistance.
(16)  A reference in this section to an acquisition or proposed acquisition of shares or units of shares is a reference to any acquisition or proposed acquisition whether by way of purchase, subscription or otherwise.
(17)  This section does not apply in relation to the doing of any act or thing pursuant to a contract entered into before the commencement of the Companies (Amendment) Act 1986 if the doing of that act or thing would have been lawful if this Act had not been enacted.
Consequences of company financing dealings in its shares, etc.
76A.—(1)  Except as provided by this section —
(a)the validity of a contract or transaction is not affected by a contravention of section 76(1)(a);
(b)the validity of a contract or transaction is not affected by a contravention of section 76(1)(b) unless the contract or transaction effects the acquisition that constitutes the contravention; and
(c)the validity of a contract or transaction is not affected by a contravention of section 76(1)(c) unless the contract or transaction effects the loan that constitutes the contravention.
(2)  Where a company makes or performs a contract, or engages in a transaction, that would, but for subsection (1), be invalid by reason that —
(a)the contract was made or performed, or the transaction was engaged in, in contravention of section 76; or
(b)the contract or transaction is related to a contract that was made or performed, or to a transaction that was engaged in, in contravention of that section,
the first-mentioned contract or transaction is, subject to the following provisions of this section, voidable at the option of the company by notice in writing given to the other party, or by notices in writing to each of the other parties, to that contract or transaction.
(3)  The Court may, on the application of a member of a company, a holder of debentures of a company, a trustee for the holders of debentures of a company or a director of a company, by order, authorise the member, holder of debentures, trustee or director to give a notice or notices under subsection (2) in the name of the company.
(4)  Where —
(a)a company makes or performs a contract, or engages in a transaction;
(b)the contract is made or performed, or the transaction is engaged in, in contravention of section 76 or the contract or transaction is related to a contract that was made or performed, or to a transaction that was engaged in, in contravention of that section; and
(c)the Court is satisfied, on the application of the company or of any other person, that the company or that other person has suffered, or is likely to suffer, loss or damage as a result of —
(i)the making or performance of the contract or the engaging in of the transaction;
(ii)the making or performance of a related contract or the engaging in of a related transaction;
(iii)the contract or transaction being void by reason of section 76 or having become void, or becoming void under this section; or
(iv)a related contract or transaction being void by reason of section 76 or having become void, or becoming void, under this section,
the Court may make such order or orders as it thinks just and equitable (including, without limiting the generality of the foregoing, all or any of the orders mentioned in subsection (5)) against any party to the contract or transaction or to the related contract or transaction, or against the company or against any person who aided, abetted, counselled or procured, or was, by act or omission, in any way, directly or indirectly, knowingly concerned in or party to the contravention.
(5)  The orders that may be made under subsection (4) include —
(a)an order directing a person to refund money or return property to the company or to another person;
(b)an order directing a person to pay to the company or to another person a specified amount of the loss or damage suffered by the company or other person; and
(c)an order directing a person to indemnify the company or another person against any loss or damage that the company or other person may suffer as a result of the contract or transaction or as a result of the contract or transaction being or having become void.
(6)  If a certificate signed by not less than two directors, or by a director and a secretary, of a company stating that the requirements of section 76(10)(a) to (j), inclusive, have been complied with in relation to the proposed giving by the company of financial assistance for the purposes of an acquisition or proposed acquisition by a person of shares or units in the company or in a holding company of the company is given to a person —
(a)the person to whom the certificate is given is not under any liability to have an order made against him under subsection (4) by reason of any contract made or performed, or any transaction engaged in, by him in reliance on the certificate; and
(b)any such contract or transaction is not invalid, and is not voidable under subsection (2), by reason that the contract is made or performed, or the transaction is engaged in, in contravention of section 76 or is related to a contract that was made or performed, or to a transaction that was engaged in, in contravention of that section.
(7)  Subsection (6) does not apply in relation to a person to whom a certificate is given under that subsection in relation to a contract or transaction if the Court, on application by the company concerned or any other person who has suffered, or is likely to suffer, loss or damage as a result of the making or performance of the contract or the engaging in of the transaction, or the making or performance of a related contract or the engaging in of a related transaction, by order, declares that it is satisfied that the person to whom the certificate was given became aware before the contract was made or the transaction was engaged in that the requirements of section 76(10) had not been complied with in relation to the financial assistance to which the certificate related.
(8)  For the purposes of subsection (7), a person shall, in the absence of proof to the contrary, be deemed to have been aware at a particular time of any matter of which an employee or agent of the person having duties or acting on behalf of the person in relation to the relevant contract or transaction was aware at the time.
(9)  In any proceeding, a document purporting to be a certificate given under subsection (6) shall, in the absence of proof to the contrary, be deemed to be such a certificate and to have been duly given.
(10)  A person who has possession of a certificate given under subsection (6) shall, in the absence of proof to the contrary, be deemed to be the person to whom the certificate was given.
(11)  If a person signs a certificate stating that the requirements of section 76(10) have been complied with in relation to the proposed giving by a company of financial assistance and any of those requirements had not been complied with in respect of the proposed giving of that assistance at the time when the certificate was signed by that person, the person shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $5,000 or to imprisonment for a term not exceeding one year or to both.
(12)  It is a defence to a prosecution for an offence under subsection (11) if the defendant proves that at the time when he signed the certificate he believed on reasonable grounds that all the requirements of section 76(10) had been complied with in respect of the proposed giving of financial assistance to which the certificate relates.
(13)  The power of a Court under section 391 to relieve a person to whom that section applies, wholly or partly and on such terms as the Court thinks fit, from a liability referred to in that section extends to relieving a person against whom an order may be made under subsection (4) from the liability to have such an order made against him.
(14)  If a company makes a contract or engages in a transaction under which it gives financial assistance as mentioned in section 76(1)(a) or lends money as mentioned in section 76(1)(c), any contract or transaction made or engaged in as a result of or by means of, or in relation to, that financial assistance or money shall be deemed for the purposes of this section to be related to the first-mentioned contract or transaction.
(15)  Any rights or liabilities of a person under this section (including rights or liabilities under an order made by the Court under this section) are in addition to and not in derogation of any rights or liabilities of that person apart from this section but, where there would be any inconsistency between the rights and liabilities of a person under this section or under an order made by the Court under this section and the rights and liabilities of that person apart from this section, the provisions of this section or of the order made by the Court shall prevail.”.
Amendment of section 115
15.  Section 115 of the Companies Act is amended by deleting the words “at a place within 5 kilometres of the office of the Registrar” in subsection (3)(a) and substituting the words “as required by subsection (1)”.
Amendment of section 131
16.  Section 131 of the Companies Act is amended —
(a)by deleting subsection (1)(a) and (b) and substituting the words “an affidavit verifying the execution of the charge and also verifying the correctness of the statement,”;
(b)by inserting, immediately after subsection (1), the following subsection:
(1A)  In connection with the registration of a charge to which this section applies which is created by a company there shall be produced to the Registrar for the purposes of inspection, whenever required by him, the instrument (if any) by which the charge is created or evidenced or a certified true copy thereof.”;
(c)by deleting the words “instrument creating or purporting to create the charge or a copy thereof” in the second and third lines of subsection (4) and substituting the words “statement of the prescribed particulars”; and
(d)by deleting sub-paragraphs (e), (f) and (g) of subsection (5) and substituting the words “the verifying affidavit.”.
Amendment of section 133
17.  Section 133 of the Companies Act is amended by deleting the words “instrument by which the charge was created or is evidenced or a copy thereof accompanied by an affidavit containing such particulars as are prescribed, and where a copy is lodged also verifying it as a true copy thereof” in the sixteenth to the twentieth lines of subsection (1) and substituting the words “verifying affidavit”.
Amendment of section 134
18.  Section 134 of the Companies Act is amended by deleting the words “stating, if applicable, the amount secured by the charge” in subsection (2) and substituting the words “of a charge”.
Amendment of section 136
19.  Section 136 of the Companies Act is amended by deleting subsection (2) and substituting the following subsection:
(2)  The memorandum shall be endorsed with a statement by the chargee of the payment, satisfaction, release or ceasing referred to in subsection (1), as the case may be, and that statement shall constitute sufficient evidence of that payment, satisfaction, release or ceasing.”.
Amendment of section 138
20.  Section 138 of the Companies Act is amended —
(a)by deleting the words “a copy of every” in subsection (1) and substituting the word “the”;
(b)by inserting, immediately after the word “Division” in subsection (1), the words “or a copy thereof”;
(c)by deleting the words “The copies of instruments” in subsection (3) and substituting the words “The instruments or copies thereof”; and
(d)by inserting, immediately after subsection (3), the following subsection:
(3A)  Any person may, on application to a company and on payment of a fee, not exceeding one dollar for every page or part thereof, be furnished with a copy of any instrument or debenture kept by the company in pursuance of this section within 3 days of his making the application.”.
Amendment of section 146
21.  Section 146 of the Companies Act is amended by inserting, immediately after the word “director” in the fourteenth line of subsection (1), the words “together with a prescribed statement that he is not disqualified from acting as a director under this Act”.
Amendment of section 149
22.  Section 149 of the Companies Act is amended —
(a)by inserting, immediately after the word “liquidation” in the second line of subsection (1)(b), the words “(whether while he was a director or at any time within 3 years of his ceasing to be a director)”;
(b)by inserting, immediately after the word “shall” where it first occurs in the seventeenth line of subsection (1), the words “, subject to subsections (6) and (7),”;
(c)by deleting subsection (3) and substituting the following subsection:
(3)  For the purposes of this section —
(a)“company” does not include an unregistered company as defined in section 350(1);
(b)a company has gone into liquidation —
(i)if it is wound up by the Court, on the date of the presentation of the winding up petition;
(ii)where a provisional liquidator was appointed under section 291(1), at the time when the declaration made under that subsection was lodged with the Registrar; and
(iii)in any other case, on the date of the passing of the resolution for voluntary winding up; and
(c)“insolvent”, in relation to a company, means that a company is unable to pay its debts and in determining whether a company is unable to pay its debts the contingent and prospective liabilities of the company shall be taken into account.”; and
(d)by inserting, immediately after subsection (5), the following subsections:
(6)  It is a defence to a prosecution under subsection (1) if the defendant proves —
(a)that, at the time he resigned as a director from a company to which subsection (1) applies, the company had not commenced business or exercised any borrowing power from the date of incorporation of the company; or
(b)that he was not aware of a fact or occurrence the existence of which was necessary to constitute the offence and that —
(i)he was not so aware on the date of the summons; or
(ii)he became so aware before the date of the summons and within 4 weeks thereafter he applied to the court for leave under this section.
(7)  For the purposes of subsection (6)(b), a person shall conclusively be presumed to have been aware of a fact or occurrence at a particular time of which he would, if he had acted with reasonable diligence, have been so aware at that time.
(8)  Nothing in this section shall apply to the directors of a prescribed company.
(9)  In subsection (8), “prescribed company” means a company or a company of a class which carries on business, as a principal activity, in such venture capital industries as the Minister may by notification in the Gazette prescribe for the purposes of this section.
(10)  The Minister may by notification in the Gazette —
(a)specify terms and conditions subject to which subsection (8) shall have effect in relation to a company specified in subsection (9); or
(b)vary or revoke any notification made under subsection (9).”.
Amendment of section 155
23.  Section 155 of the Companies Act is amended by inserting, immediately after the word “that” in the fourth line of subsection (3), the words “, within a period of 5 years,”.
Repeal of section 158
24.  Section 158 of the Companies Act is repealed.
New sections 160A to 160D
25.  The Companies Act is amended by inserting, immediately after section 160, the following sections:
Substantial property transactions
160A.—(1)  Except as provided in section 160B, a company shall not enter into an arrangement —
(a)whereby a director of the company or its holding company, or a person connected with such a director, acquires or is to acquire one or more non-cash assets of the requisite value from the company; or
(b)whereby the company acquires or is to acquire one or more non-cash assets of the requisite value from such a director or a person so connected,
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.
(2)  For this purpose a non-cash asset is of the requisite value if at the time the arrangement in question is entered into its value is not less than $5,000 but (subject to that) exceeds $200,000 or 10% of the company’s asset value, that is —
(a)except in a case falling within paragraph (b) below, the value of the company’s net assets determined by reference to the accounts prepared and laid under Division I of Part VI in respect of the last preceding financial year in respect of which such accounts were so laid; and
(b)where no accounts have been so prepared and laid before that time, the amount of the company’s called-up share capital.
Exceptions from section 160A
160B.—(1)  No approval shall be required to be given under section 160A by any body corporate unless it is a company within the meaning of this Act, or if it is a wholly-owned subsidiary of any body corporate, wherever incorporated.
(2)  Section 160A(1) shall not apply to an arrangement for the acquisition of a non-cash asset —
(a)if the asset is to be acquired by a holding company from any of its wholly-owned subsidiaries or from a holding company by any of its wholly-owned subsidiaries, or by one wholly-owned subsidiary of a holding company from another wholly-owned subsidiary of that same holding company; or
(b)if the arrangement is entered into by a company which is being wound up, unless the winding up is a members’ voluntary winding up.
(3)  Section 160A(1)(a) shall not apply to an arrangement whereby a person is to acquire an asset from a company of which he is a member, if the arrangement is made with that person in his character as a member.
Liability arising from contravention of section 160A
160C.—(1)  An arrangement entered into by a company in contravention of section 160A, and any transaction entered into in pursuance of the arrangement (whether by the company or any other person) shall be voidable at the instance of the company unless one or more of the conditions specified in subsection (2) is satisfied.
(2)  Those conditions are that —
(a)restitution of any money or other asset which is the subject-matter of the arrangement or transaction is no longer possible or the company has been indemnified in pursuance of this section by any other person for the loss or damage suffered by it; or
(b)any rights acquired bona fide for value and without actual notice of the contravention by any person who is not a party to the arrangement or transaction would be affected by its avoidance; or
(c)the arrangement is, within a reasonable period, affirmed by the company in general meeting and, if it is an arrangement for the transfer of an asset to or by a director of its holding company or a person who is connected with such a director, is so affirmed with the approval of the holding company given by a resolution in general meeting.
(3)  If an arrangement is entered into with a company by a director of the company or its holding company or a person connected with him in contravention of section 160A, that director and the person so connected, and any other director of the company who authorised the arrangement or any transaction entered into in pursuance of such an arrangement, is liable —
(a)to account to the company for any gain which he has made directly or indirectly by the arrangement or transaction; and
(b)(jointly and severally with any other person liable under this subsection) to indemnify the company.
(4)  Subsection (3) is without prejudice to any liability imposed otherwise than by that subsection, and is subject to subsections (5) and (6); and the liability under subsection (3) arises whether or not the arrangement or transaction entered into has been avoided in pursuance of subsection (1).
(5)  If an arrangement is entered into by a company and a person connected with a director of the company or its holding company in contravention of section 160A that director is not liable under subsection (3) if he shows that he took all reasonable steps to secure the company’s compliance with that section.
(6)  In any case, a person so connected and any such other director as is mentioned in subsection (3) is not so liable if he shows that, at the time the arrangement was entered into, he did not know the relevant circumstance constituting the contravention.
Interpretation
160D.—(1)  In section 160A, “called-up share capital”, in relation to a company, means so much of its share capital as equals the aggregate amount of the calls made on its shares (whether or not those calls have been paid), together with any share capital paid up without being called and any share capital to be paid on a specified future date under the articles, the terms of allotment of the relevant shares or any other arrangements for payment of those shares.
(2)  For the purposes of sections 160A, 160B and 160C, a person is connected with a director of a company if, but only if, he is —
(a)that director’s spouse, child or stepchild; or
(b)except where the context otherwise requires, a body corporate with which the director is associated; or
(c)a person acting in his capacity as the trustee (other than as trustee under an employees’ share scheme or a pension scheme) of any trust the beneficiaries of which include the director, his spouse or any of his children or step-children or a body corporate with which he is associated or the terms of which confer a power on the trustees that may be exercised for the benefit of the director, his spouse or any of his children or step-children or any such body corporate; or
(d)a person acting in his capacity as partner of that director or of any person who, by virtue of paragraph (a), (b) or (c) above, is connected with that director,
unless that person is also a director of the company.
(3)  For the purposes of subsection (2) —
(a)a director of a company is associated with a body corporate if, but only if, he and the persons connected with him, together, are interested in shares comprised in the equity share capital of that body corporate of a nominal value equal to at least one-fifth of that share capital or are entitled to exercise or control the exercise of more than one-fifth of the voting power at any general meeting of that body; and
(b)a director of a company shall be deemed to control a body corporate if, but only if —
(i)he or a person connected with him is interested in any part of the equity share capital of that body or is entitled to exercise or control the exercise of any part of the voting power at any general meeting of that body; and
(ii)that director, the persons connected with him and the other directors of that company, together, are interested in more than one-half of that share capital or are entitled to exercise or control the exercise of more than one-half of that voting power.
For the purposes of this subsection, a body corporate with which a director is associated and a trustee of a trust the beneficiary of which is or may be such a body corporate shall be regarded as if they were not connected with that director.
(4)  Section 7 (interest in shares) shall have effect for the purposes of subsection (3) except that the words “more than one-half” shall be substituted for the words “not less than 15%” in subsection (4)(c) of that section; and in this subsection —
(a)“equity share capital” has the same meaning as in section 69B; and
(b)references to voting power the exercise of which is controlled by a director shall, without prejudice to the other provisions of that subsection, include references to voting power the exercise of which is controlled by a body corporate controlled by that director.”.
Amendment of section 163
26.  Section 163 of the Companies Act is amended —
(a)by inserting, immediately after the word “company” where it first occurs in the third line of subsection (2), the words “(other than an exempt private company)” and by inserting, immediately after the word “such” in the third line, the word “other”;
(b)by inserting, immediately after the word “company” where it first occurs in the second line of subsection (4)(a), the words “(whether that company is incorporated in Singapore or otherwise)”; and
(c)by deleting the words “recovery of any loan or the enforcement of any guarantee or security whether made or given by the company or any other person” in subsection (6) and substituting the words “company from recovering the amount of any loan or amount for which it becomes liable under any guarantee entered into or in respect of any security given contrary to this section”.
New section 164A
27.  The Companies Act is amended by inserting, immediately after section 164, the following section:
Power to require disclosure of directors’ emoluments
164A.—(1)  If a company is served with a notice sent by or on behalf of —
(a)at least 10% of the total number of members of the company; or
(b)the holders in aggregate of not less than 5% in nominal value of the company’s issued share capital,
requiring the emoluments and other benefits received by the directors of the company or of a subsidiary to be disclosed, the company shall, —
(c)within 14 days or such longer period as the Registrar may allow, prepare or cause to be prepared and cause to be audited a statement showing the total amount of emoluments and other benefits paid to or received by each of the directors of the company and each director of a subsidiary; including any amount paid by way of salary, for the financial year immediately preceding the service of the notice;
(d)when the statement referred to in paragraph (c) has been audited, within 14 days send a copy of the statement to all persons entitled to receive notice of general meetings of the company; and
(e)lay the statement before the next general meeting of the company held after the statement is audited.
(2)  If default is made in complying with this section, the company and every director of the company shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $10,000.”.
Amendment of section 165
28.  Section 165(2) of the Companies Act is amended —
(a)by deleting the words “24 hours” wherever they appear in paragraphs (a) and (b) and substituting in each case the words “two days”;
(b)by deleting sub-paragraph (a)(i); and
(c)by deleting paragraph (c) and substituting the following paragraph:
(c)in the case of a notice under subsection (1)(d) within two days after the date on which the director becomes a director.”.
Repeal of section 167
29.  Section 167 of the Companies Act is repealed.
Amendment of section 169
30.  Section 169 of the Companies Act is amended —
(a)by deleting the words “alter or add to its articles so as to” in subsection (1) and substituting the words “or otherwise”;
(b)by inserting at the end of subsection (1), the words “and any resolution passed in breach of this section shall be void”; and
(c)by deleting the words “Alteration of articles so as to improve” in the marginal note and substituting the words “Provision and improvement of”.
Amendment of section 171
31.  Section 171 of the Companies Act is amended by inserting, immediately after subsection (1), the following subsections:
(1A)  It shall be the duty of the directors of a company to take all reasonable steps to secure that each secretary of the company is a person who appears to them to have the requisite knowledge and experience to discharge the functions of secretary of the company and who —
(a)on the coming into operation of this provision held the office of secretary;
(b)for at least 3 years of the 5 years immediately preceding the appointment as secretary, held the office of secretary of a company;
(c)is a qualified person under the Legal Profession Act (Cap. 217), an accountant registered with the Singapore Society of Accountants, a member of the Singapore Association of the Institute of Chartered Secretaries and Administrators, a member of the Association of International Accountants (Singapore Branch), or a member of such other professional association as may be prescribed; or
(d)is a person, who, by virtue of such academic or professional qualifications as may be prescribed, is capable of discharging those functions.
(1B)  In this subsection and section 173 “secretary” includes an assistant or deputy secretary.”.
Amendment of section 173
32.  Section 173 of the Companies Act is amended —
(a)by deleting the words “his consent in writing to appointment as such” in the second line of subsection (2) and substituting the words “a signed copy of his consent to act as director under this Act together with a prescribed statement that he is not disqualified to act as a director”;
(b)by inserting, immediately after the word “address,” in subsection (2)(a), the words “his nationality,”;
(c)by deleting the word “and” at the end of subsection (6)(d);
(d)by deleting the words “, secretary or auditor” in subsection 6(e) and substituting the words “or secretary” and by deleting the full-stop at the end of that subsection and substituting the word “; and”; and
(e)by inserting, immediately after paragraph (e) of subsection (6), the following paragraph:
(f)within one month of any change in the identification or nationality of any director, manager or secretary, a notice in the prescribed form notifying the Registrar of the new identification or nationality.”.
Amendment of section 179
33.  Section 179(5) of the Companies Act is amended by deleting the words “A certificate” and substituting the words “Subject to section 32 (8) and (9), a certificate”.
Amendment of section 184
34.  Section 184 of the Companies Act is amended —
(a)by inserting, immediately after the word “days’” in the fifth line of subsection (1), the word “written”; and
(b)by inserting, immediately after the word “days’” in the penultimate line of subsection (2), the word “written”.
Amendment of section 196
35.  Section 196(8) of the Companies Act is amended by deleting the word “President” in the third line and substituting the word “Minister”.
Amendment of section 201
36.  Section 201 of the Companies Act is amended —
(a)by deleting the marginal note and substituting the words “Accounts, consolidated accounts and directors’ report.”;
(b)by inserting, immediately after the word “meeting” at the end of subsection (1), the words “being a profit and loss account that gives a true and fair view of the profit and loss of the company for the period of accounting as shown in the accounting and other records of the company”;
(c)by inserting, immediately after the words “made up” at the end of subsection (3), the words “being a balance-sheet that gives a true and fair view of the state of affairs of the company as at the end of the period to which it relates”;
(d)by inserting, immediately after subsection (3), the following subsections:
(3A)  Where, at the end of its financial year, a company is a holding company, the directors of the company shall also cause to be made out and laid before the company at its annual general meeting, consolidated accounts dealing with —
(a)the profit or loss of the company and its subsidiaries for their respective last financial years; and
(b)the state of affairs of the company and its subsidiaries as at the end of their respective last financial years,
and giving a true and fair view of the profit or loss and state of affairs so far as they concern members of the holding company.
(3B)  Notwithstanding subsection (3A) consolidated accounts shall not be required where the company is at the end of its financial year a wholly-owned subsidiary of another corporation incorporated in Singapore.
(3C)  The directors shall (before the profit and loss account and balance-sheet referred to in subsections (1) and (3) are made out) take reasonable steps —
(a)to ascertain what action has been taken in relation to the writing off of bad debts and the making of provisions for doubtful debts and to cause all known bad debts to be written off and adequate provision to be made for doubtful debts;
(b)to ascertain whether any current assets (other than current assets to which paragraph (a) applies) are unlikely to realise in the ordinary course of business their value as shown in the accounting records of the company and, if so, to cause —
(i)those assets to be written down to an amount which they might be expected so to realise; or
(ii)adequate provision to be made for the difference between the amount of the value as so shown and the amount that they might be expected so to realise; and
(c)to ascertain whether any non-current asset is shown in the books of the company at an amount which, having regard to its value to the company as a going concern, exceeds the amount which it would have been reasonable for the company to spend to acquire that asset as at the end of the financial year and (unless adequate provision for writing down that asset is made) to cause to be included in the accounts such information and explanations as will prevent the accounts from being misleading by reason of the overstatement of the amount of that asset.”;
(e)by inserting, immediately after the word “company” in the second line of subsection (4), the words “and if it is a holding company for which consolidated accounts are required, the consolidated accounts”, and by inserting, immediately after the word “section” at the end of subsection (4), the words “and the auditor’s report required by section 207 shall be attached to or endorsed upon the accounts or the consolidated accounts”;
(f)by inserting, immediately after the word “company” in the first line of subsection (5), the words “(other than a holding company for which consolidated accounts are required)”;
(g)by deleting 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” in the seventh, eighth and ninth lines of subsection (5);
(h)by deleting the word “Each” in the first line of subsection (6) and substituting the word “The”;
(i)by inserting, immediately after subsection (6), the following subsection:
(6A)  The directors of a holding company shall cause to be attached to all consolidated accounts made out under subsection (3A), a report made, in accordance with a resolution of the directors, and signed by not less than two of them with respect to the profit or loss, and the state of affairs, of the group of companies of the holding company as at the end of the financial year of the holding company, stating —
(a)the names of the directors of the holding company in office at the date of the report;
(b)the principal activities of the corporations in the group in the course of the financial year and any significant change in the nature of those activities during that period;
(c)the names of any subsidiaries acquired or disposed of during the financial year, the consideration for each such acquisition or disposal and the amount in each case of the net tangible assets of the subsidiary acquired or disposed of and, in the case of a subsidiary, not being a wholly-owned subsidiary, the extent of the holding company’s interest therein;
(d)where, during the financial year, any corporation in the group has issued any shares or debentures — the purposes of the issue, the classes of shares or debentures issued, the number of shares of each class and the amount, term and rate of debentures of each class, and the terms of issue of each class of the shares;
(e)whether at the end of that financial year, there subsist arrangements to which the holding company is a party, being arrangements whose objects are, or one of whose objects is, to enable directors of the holding company to acquire benefits by means of the acquisition of shares in, or debentures of, the company or any other body corporate, or there have, at any time in that year, subsisted such arrangements as aforesaid to which the holding company was a party, and if so the report shall contain a statement explaining the effect of the arrangements and giving the names of the persons who at any time in that year were directors of the holding company and held, or whose nominees held, shares or debentures acquired in pursuance of the arrangements;
(f)as respects each person who, at the end of the financial year, was a director of the holding company, whether or not (according to the register kept by the company for the purposes of section 164 relating to the obligation of a director of a company to notify it of his interests in shares in, or debentures of, the company and of every other body corporate, being the company’s subsidiary or holding company or a subsidiary of the company’s holding company) he was, at the end of that year, interested in shares in, or debentures of, the holding company or any other such body corporate and, if he was, the number and amount of shares in, and debentures of, each body (specifying it) in which, according to that register, he was then interested and whether or not, according to that register, he was, at the beginning of that year (or, if he was not then a director, when he became a director), interested in shares in, or debentures of, the holding company or any other such body corporate and, if he was, the number and amount of shares in, and debentures of, each body (specifying it) in which, according to that register, he was interested at the beginning of that year or, as the case may be, when he became a director;
(g)the amount, if any, which the directors of the holding company recommend should be paid by way of dividend, and any amounts which have been paid or declared by way of dividend since the end of the previous financial year of the holding company, indicating which of those amounts (if any) have been shown in a previous report under this subsection or subsection (6);
(h)whether, so far as debts owing to the holding company are concerned, the directors of the holding company (before the profit and loss account and balance-sheet were made out) took reasonable steps to ascertain what action had been taken in relation to the writing off of bad debts and the making of provisions for doubtful debts, and to cause all known bad debts to be written off and adequate provision to be made for doubtful debts;
(i)whether at the date of the report the directors of the holding company are aware of any circumstances which would render the amount written off for bad debts, or the amount of the provision for doubtful debts, in the group of companies inadequate to any substantial extent (and, if so, giving particulars of the circumstances);
(j)whether the directors of the holding company (before the profit and loss account and balance-sheet were made out) took reasonable steps to ascertain whether any current assets of the holding company (other than current assets to which paragraph (i) applies) were unlikely to realise in the ordinary course of business their value as shown in the accounting records of the company and, if so, to cause —
(i)those assets to be written down to an amount which they might be expected so to realise; or
(ii)adequate provision to be made for the difference between the amount of the value as so shown and the amount that they might be expected so to realise;
(k)whether at the date of the report the directors of the holding company are aware of any circumstances which would render the values attributed to current assets in the consolidated accounts misleading (and, if so, giving particulars of the circumstances);
(l)whether any contingent or other liability of any corporation in the group has become enforceable, or is likely to become enforceable within the period of 12 months after the end of the financial year, which, in the opinion of the directors of the holding company, will or may substantially affect the ability of the corporation to meet its obligations as and when they fall due (and, if so, giving particulars of any such liability);
(m)whether, at the date of the report, the directors of the holding company are aware of any circumstances, not otherwise dealt with in the report or consolidated accounts, which would render any amount stated in the consolidated accounts misleading (and, if so, giving particulars of the circumstances);
(n)whether there exists at the date of the report —
(i)any charge on the assets of the holding company which has arisen since the end of the financial year which secures the liabilities of any other person (and, if so, giving particulars of any such charge and, so far as practicable, of the amount secured); and
(ii)any contingent liability which has arisen since the end of the financial year (and, if so, stating the general nature thereof and, so far as practicable, the maximum amount, or an estimate of the maximum amount, for which the holding company could become liable in respect thereof);
(o)whether the results of the operations of the group or of the holding company during the financial year were, in the opinion of the directors of the holding company, substantially affected by any item, transaction or event of a material and unusual nature (and, if so, giving particulars of that item, transaction or event and the amount or the effect thereof, if known or reasonably ascertainable); and
(p)whether there has arisen in the interval between the end of the financial year and the date of the report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors of the holding company, to affect substantially the results of the operations of the group or of the holding company for the financial year in which the report is made (and, if so, giving particulars of the item, transaction or event).”;
(j)by deleting the words “subsection (6)” in the first line of subsection (7) and substituting the words “subsections (6) and (6A)”;
(k)by inserting, immediately after the word “accounts” in the sixth line of subsection (8), the words “or, if the company is a holding company, the consolidated accounts in accordance with the Ninth Schedule”;
(l)by deleting the words “regarded by the directors as being the company’s ultimate holding company and, if known to them, the country in which it is incorporated” in subsection (10) and substituting the words “which is its ultimate holding company”;
(m)by inserting, immediately after the word “granted” in the first line of subsection (11), the words “by a company, other than a holding company for which consolidated accounts are required”;
(n)by inserting, immediately after subsection (11), the following subsections:
(11A)  Where any of the particulars required by subsection (11) have been stated in a previous report they may be stated by reference to that report.
(11B)  Where a holding company or any of its subsidiaries has at any time granted to a person an option to have shares issued to him in the company or subsidiary the directors of the holding company shall state in the report made under subsection (6A) the name of the corporation in respect of the shares in which the option was granted and the other particulars required under subsections (11) and (12).”;
(o)by deleting the words “subsection (5)” in the first line of subsection (12) and substituting the words “subsections (5) and (6A)”;
(p)by deleting subsection (14) and substituting the following subsection:
(14)  Without affecting the generality of the preceding provisions of this section, the accounts of a company and, if it is a holding company for which consolidated accounts are required, the consolidated accounts, shall comply with such of the requirements of the Ninth Schedule as are applicable to them, but where accounts or consolidated accounts prepared in accordance with those requirements would not otherwise give a true and fair view of the matters required by this section to be dealt with in the accounts or consolidated accounts, the directors of the company shall add such information and explanations as will give a true and fair view of those matters.”;
(q)by inserting, immediately after the word “accompanied” in the fifth line of subsection (15) the words “, before the auditor reports on the accounts under this Part,”;
(r)by deleting the word “and” at the end of subsection (15)(a) and by deleting the full-stop at the end of paragraph (b) and substituting the word “; and” and by inserting, immediately thereafter the following paragraph:
(c)at the date of the statement there are reasonable grounds to believe that the company will be able to pay its debts as and when they fall due.”;
(s)by deleting subsection (16); and
(t)by deleting the words “subsections (5) to (17)” in the sixth line of subsection (18) and substituting the words “this section (other than subsections (1) to (3C))”, and by inserting, immediately after the word “account” in the seventh line of that subsection, the words “, or consolidated accounts if it is a holding company”.
New section 201A
37.  The Companies Act is amended by inserting, immediately after section 201, the following section:
Consolidated accounts not to be issued, etc., until receipt of accounts of subsidiaries
201A.—(1)  Subject to subsection (5) the directors of a holding company shall not cause to be made out the consolidated accounts referred to in section 201(3A) or make the report referred to in subsection (6A) of that section unless they have received from each subsidiary its audited accounts, the statements required under section 201, the directors’ report in accordance with subsection (6A) of that section and the auditor’s report in accordance with section 207.
(2)  Where a subsidiary of a holding company is incorporated outside Singapore it is sufficient compliance with this section if the directors of the holding company receive from the subsidiary accounts and reports corresponding to those required under this section and in accordance with the law of the place of incorporation of the subsidiary.
(3)  The directors of a subsidiary shall, at the request of the directors of the holding company supply all such information as is required for the preparation of consolidated accounts of the holding company and its subsidiaries, and of the report of the directors of the holding company.
(4)  The directors of a holding company are, unless they know or have reason to suspect that any matter in any accounts, report or information furnished by the directors of a subsidiary is false or misleading, entitled to rely on the accounts, report or information for the purpose of the preparation of the consolidated accounts and their report so far as they relate to the affairs of the subsidiary.
(5)  Where the directors of a holding company, having taken all such steps as are reasonably available to them, are unable to obtain from the directors of a subsidiary any accounts, report or other information required for the preparation of the consolidated accounts and the directors’ report of the group, they may cause to be made out the consolidated accounts and make the directors’ report without incorporating therein or including therewith the first-mentioned accounts, report or other information relating to the subsidiary but with such qualifications and explanations as are necessary to prevent the consolidated accounts and report from being misleading.
(6)  Where the directors of a holding company have caused to be made out the consolidated accounts and have made the directors’ report in accordance with subsection (5) they shall send to the shareholders of the holding company, within one month after receiving the accounts, report or other information from the directors of the subsidiary, a copy of the accounts and report or a statement embodying the other information (as the case may be) together with a statement by the directors of the holding company containing such qualifications and explanations of the consolidated accounts and of their report as are necessary having regard to the accounts, report or information received from the subsidiary.”.
Amendment of section 202
38.  Section 202 is amended by deleting the figure “(6)” wherever it appears in subsections (1) and (2) and substituting in each case the words “(6) and (6A)”.
Amendment of section 203
39.  Section 203 of the Companies Act is amended —
(a)by inserting, immediately after the word “balance-sheet” in the second line of subsection (1), the words “and if it is a holding company, consolidated accounts”;
(b)by inserting, immediately after the word “balance-sheets” in the third line of subsection (2), the words “or consolidated accounts”;
(c)by inserting, immediately after the word “company” in the seventh line of subsection (2), the words “and consolidated accounts (if any)”; and
(d)by deleting the word “document” in the fifth line of subsection (3) and substituting the words “accounts or consolidated accounts and all documents referred to in subsection (1) or (2)”.
Amendment of section 204
40.  Section 204 of the Companies Act is amended by deleting subsection (2) and substituting the following subsection:
(2)  In any proceedings against a person for failure to take all reasonable steps to comply with, or to secure compliance with, the preceding provisions of this Division relating to the form and content of the accounts of a company or consolidated accounts of a holding company by reason of an omission from the accounts or consolidated accounts, it is a defence to prove that the omission was not intentional and that the information omitted was immaterial and did not affect the giving of a true and fair view of the matters required by section 201 to be dealt with in the accounts or consolidated accounts, as the case may be.”.
Amendment of section 207
41.  Section 207 of the Companies Act is amended —
(a)by inserting, immediately after subsection (1), the following subsection:
(1A)  A report by an auditor of a company under subsection (1) shall be furnished by the auditor to the directors of the company in sufficient time to enable the company to comply with the requirements of section 203(1) in relation to that report.”;
(b)by deleting the words “so as to give a true and fair view of the company’s affairs” in the second and third lines of subsection (2)(a)(ii) and substituting the words “so as in the case of a balance-sheet to give a true and fair view of the company’s affairs and in the case of a profit and loss account to give a true and fair view of the company’s profit or loss”;
(c)by deleting the word “and” at the end of subsection (3)(c);
(d)by deleting the comma at the end of subsection (3)(d) and substituting the word “; and”; and
(e)by inserting, immediately after subsection (3)(d), the following paragraph:
(e)where consolidated accounts are prepared otherwise than as one set of consolidated accounts for the group, whether he agrees with the reasons for preparing them in the form in which they are prepared, as given by the directors in the accounts,”.
New section 209A
42.  The Companies Act is amended by inserting, immediately after section 209, the following section:
Interpretation
209A.  In this Part and the Ninth Schedule, unless the contrary intention appears —
“current liability”, in relation to accounts or consolidated accounts, means a liability that would in the ordinary course of events be payable within 12 months after the end of the financial year to which the accounts or consolidated accounts relate;
“consolidated accounts”, in relation to a holding company, means —
(a)a set of consolidated accounts for the group of companies of that holding company;
(b)two or more sets of consolidated accounts together covering that group;
(c)separate accounts for each corporation in that group; or
(d)a combination of one or more sets of consolidated accounts and one or more separate accounts together covering that group;
“group of companies”, in relation to a holding company, means the holding company and the corporations that are subsidiaries of the holding company;
“holding company” means a corporation that is the holding company of another corporation within the meaning of section 6;
“non-current liability” means a liability that is not a current liability;
“the profit or loss” means —
(a)in relation to a corporation that is not a holding company — the profit or loss resulting from operations of that corporation;
(b)in relation to a corporation that is a holding company of a group of companies for which consolidated accounts are required — the profit or loss resulting from operations of that corporation;
(c)in relation to a corporation referred to in paragraph (b) and its subsidiaries — the profit or loss resulting from operations of the group of companies of which the corporation is the holding company; and
(d)in relation to a corporation that is a holding company of a group of companies for which consolidated accounts are not required — the profit or loss resulting from operations of that corporation.”.
Application of sections 36 to 42
43.—(1)  The amendments made by sections 36 to 42 of this Act do not apply in relation to a company to, or in respect of, the financial year of the company that began on or before the date of commencement of the Companies (Amendment) Act 1986 and ends after that date.
(2)  To the extent to which by virtue of subsection (1) amendments made by sections 36 to 42 of this Act do not apply in relation to a company, Divisions 1 and 2 of Part VI and the Ninth Schedule so apply as if the amendments had not been enacted.
Amendment of section 213
44.  Section 213 of the Companies Act is amended —
(a)by deleting the words “even though such acquisition does not confer de facto control” at the end of subsection (3);
(b)by substituting a full-stop for the comma after the word “company” in the fifteenth line of subsection (9)(c) and by deleting the words “but nothing in this paragraph shall prevent an inference of a firm intention being drawn where the percentage of shares acquired in an offeree company is below that needed for acquiring effective control.”;
(c)by inserting, immediately after subsection (9)(c), the following paragraph:
(d)Where the offeror corporation has stated in a public announcement that the making of the take-over offer is subject to the fulfilment of certain conditions which are specified in the announcement, the offeror corporation shall notwithstanding paragraph (c), give or cause to be given a notice in writing of the scheme referred to in subsection (4)(a) to the offeree company within 14 days of the fulfilment of those conditions.”; and
(d)by inserting, immediately after subsection (10), the following subsection:
(10A)  Nothing in this section and the Tenth Schedule shall be construed as placing an obligation upon an offeror corporation —
(a)to extend a take-over offer to the holders of any class of share capital in the offeree company which carries votes; and
(b)to comply with this section and the Tenth Schedule where the offeror corporation holds shares carrying more than 50% of the voting rights attributable to the share capital of the offeree company before the take-over offer is made.”.
Amendment of section 216
45.  Section 216 of the Companies Act is amended by deleting the words “transferred or” in subsection (7).
New Part VIIIA
46.  The Companies Act is amended by inserting, immediately after Part VIII, the following Part:
PART VIIIA
JUDICIAL MANAGEMENT
Application to Court for a company to be placed under judicial management and for the appointment of a judicial manager
227A.  Where a company or where a creditor or creditors of the company consider that —
(a)the company is or will be unable to pay its debts; and
(b)there is a reasonable probability of rehabilitating the company or of preserving all or part of its business as a going concern or that otherwise the interests of creditors would be better served than by resorting to a winding up,
an application may be made to the Court under section 227B for an order that the company should be placed under the judicial management of a judicial manager.
Power of the Court to make a judicial management order and appoint a judicial manager
227B.—(1)  Where a company (with or without a resolution of its directors or members) or a creditor or creditors (including any contingent or prospective creditor or creditors or all or any of those parties, together or separately), pursuant to section 227A, makes an application, by way of petition, for an order that the company should be placed under the judicial management of a judicial manager, the Court may make a judicial management order in relation to the company if, and only if, —
(a)it is satisfied that the company is or will be unable to pay its debts; and
(b)it considers that the making of the order would be likely to promote one or more of the following purposes, namely:
(i)the survival of the company, or the whole or part of its undertaking as a going concern;
(ii)the approval under section 210 of a compromise or arrangement between the company and any such persons as are mentioned in that section;
(iii)a more advantageous realisation of the company’s assets would be effected than on a winding up.
(2)  Any judicial management order made under subsection (1) shall direct that during the period in which the order is in force the affairs, business and property of the company shall be managed by a judicial manager appointed for the purpose by the Court.
(3)  In any application for a judicial management order under subsection (1), the applicant shall nominate a person who is an approved company auditor, who is not the auditor of the company, to act as the judicial manager. The Court may reject the person nominated by the applicant and appoint another person in his stead or it may invite the Minister to make a nomination, or the Minister may himself nominate a person to act as judicial manager, if he considers that the public interest so requires, and any such person appointed by the Court or nominated by the Minister need not be an approved company auditor. In a case where the nomination is made by the company, the person nominated shall be approved by the majority of creditors. In a case where the nomination is made by the Minister he may be heard in support of the nomination and for this purpose may be represented.
(4)  When a petition is presented to the Court, notice of the petition shall be given to any person who has appointed or is or may be entitled to appoint a receiver and manager of the whole (or substantially the whole) of a company’s property by or on behalf of the holder of any debentures of the company secured by a floating charge or by a floating charge and one or more fixed charges which, if created under an instrument before or after this Act comes into force, such instrument shall be deemed to include the power to present a petition under this section.
(5)  Subject to subsection (10) the Court may dismiss a petition if it is satisfied that —
(a)a receiver referred to in subsection (4) has been or will be appointed; or
(b)the making of the order is opposed by a person who has appointed or is entitled to appoint such a receiver.
(6)  On hearing the petition, the Court may dismiss the petition or adjourn the hearing conditionally or unconditionally or make an interim order or any other order that it thinks fit.
(7)  A judicial management order shall not be made in relation to a company —
(a)after the company has gone into liquidation;
(b)where the company is a bank licensed under the Banking Act (Cap. 182) or is a finance company licensed under the Finance Companies Act (Cap. 191).
(8)  A judicial management order shall, unless it is otherwise discharged, remain in force for a period of 180 days from the date of the making of the order but the Court may, on application of a judicial manager, increase this period subject to such terms as the Court may impose.
(9)  The costs and expenses of any unsuccessful petition made under this section shall, unless the Court otherwise orders, be borne by the petitioner.
(10)  Nothing in this section shall preclude a Court from making a judicial management order and appointing a judicial manager if it considers the public interests so requires.
(11)  For the purposes of this Part “property” in relation to a company includes money, goods, things in action and every description of property, whether real or personal, and whether in Singapore or elsewhere, and also obligations and every description of interest whether present or future or vested or contingent arising out of, or incidental to, property.
(12)  The definition in section 254(2) of “inability to pay debts” shall apply for the purposes of this section as it applies for the purposes of Division 2 of Part X.
Effect of application for a judicial management order
227C.  During the period beginning with the presentation of a petition for a judicial management order and ending with the making of such an order or the dismissal of the petition —
(a)no resolution shall be passed or order made for the winding up of the company;
(b)no steps shall be taken to enforce any charge on or security over the company’s property;
(c)no other proceedings and no execution or other legal process shall be commenced or continued against the company or its property;
(d)no disposition of the property of the company including things in action and no transfer of shares or alteration in the status of the members of the company shall be made.
Effect of judicial management order
227D.—(1)  On the making of a judicial management order, any receiver or receiver and manager shall vacate office.
(2)  During the period for which a judicial management order is in force —
(a)no resolution shall be passed or order made for the winding up of the company;
(b)no receiver of the kind referred to in section 227B(4) of the company shall be appointed;
(c)no other proceedings and no execution or other legal process shall be commenced or continued and no distress may be levied against the company or its property except with the consent of the judicial manager or with leave of the Court and (where the Court gives leave) subject to such terms as the Court may impose; and
(d)no steps may be taken to enforce security over the company’s property except with the consent of the judicial manager or with leave of the Court and (where the Court gives leave) subject to such terms as the Court may impose.
Notification of judicial management order
227E.—(1)  Every invoice, order for goods or business letter which, at a time when a judicial management order is in force in relation to a company, is issued by or on behalf of the company or the judicial manager, being a document on or in which the company’s name appears, shall contain a statement that the affairs, business and property of the company are being managed by the judicial manager.
(2)  If default is made in complying with this section, the company, the judicial manager and any officer of the company who knowingly and wilfully authorises or permits the default shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $10,000 and also to a default penalty.
Vacancy in appointment of judicial manager
227F.  If a vacancy occurs by death, resignation or otherwise in the office of a judicial manager of a company, the Court may, on the application of the company or any creditor or creditors of the company or the Minister, by order, fill the vacancy.
General powers and duties of judicial manager
227G.—(1)  On the making of a judicial management order, the judicial manager shall take into his custody or under his control all the property to which the company is or appears to be entitled.
(2)  During the period for which a judicial management order is in force, all powers conferred and duties imposed on the directors by this Act or by the memorandum or articles of association of the company shall be exercised and performed by the judicial manager and not by the directors; but nothing in this subsection shall require the judicial manager to call any meetings of the company.
(3)  The judicial manager of a company —
(a)shall do all such things as may be necessary for the management of the affairs, business and property of the company; and
(b)shall do all such other things as the Court may by order sanction.
(4)  Without prejudice to the generality of subsection (3)(a), the powers conferred by that subsection shall include the powers specified in the Eleventh Schedule.
(5)  Nothing in this section shall be taken as authorising the judicial manager of a company to make any payment towards discharging any debt to which the company was subject on the making of the judicial management order unless —
(a)the making of the payment is sanctioned by the Court or the payment is made in pursuance of a compromise or arrangement so sanctioned; or
(b)the payment is made towards discharging sums secured by a security to which section 227H(2), (5) and (6) apply.
(6)  The judicial manager of a company may, if he thinks fit, at any time summon a meeting of the company’s creditors; and the judicial manager shall summon such a meeting if he is directed to do so by the Court.
(7)  Any alteration in the company’s memorandum or articles made by virtue of an order under subsection (3)(b) is of the same effect as if duly made by resolution of the company, and the provisions of this Act apply to the memorandum or articles as so altered accordingly.
(8)  An office copy of an order under subsection (3)(b) sanctioning the alteration of the company’s memorandum or articles shall, within 14 days from the making of the order, be delivered by the judicial manager to the Registrar.
(9)  A person dealing with the judicial manager of a company in good faith and for value shall not be concerned to inquire whether the judicial manager is acting within his powers.
Power to deal with charged property, etc.
227H.—(1)  The judicial manager of a company may dispose of or otherwise exercise his powers in relation to any property of the company which is subject to a security to which this subsection applies as if the property were not subject to the security.
(2)  Where, on an application by the judicial manager of a company, the Court is satisfied that the disposal (with or without other assets) of any property of the company subject to a security to which this subsection applies would be likely to promote one or more of the purposes specified in the judicial management order, the Court may by order authorise the judicial manager to dispose of the property as if it were not subject to the security.
(3)  Subsection (1) applies to any security which, as created, was a floating charge and subsection (2) applies to any other security.
(4)  Where any property is disposed of under subsection (1), the holder of the security shall have the same priority in respect of any property of the company directly or indirectly representing the property disposed of as he would have had in respect of the property subject to the security.
(5)  It shall be a condition of an order under subsection (2) that the net proceeds of the disposal shall be applied towards discharging the sums secured by the security.
(6)  Where a condition imposed in pursuance of subsection (5) relates to two or more securities, that condition shall require the net proceeds of the disposal to be applied towards discharging the sums secured by those securities in the order of their priorities.
(7)  An office copy of an order under subsection (2) shall, within 14 days after the making of the order, be sent by the judicial manager to the Registrar.
(8)  If the judicial manager, without reasonable excuse, fails to comply with subsection (7), he shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $5,000 and also to a default penalty.
Agency and liability for contracts
227I.—(1)  The judicial manager of a company —
(a)shall be deemed to be the agent of the company;
(b)shall be personally liable on any contract entered into or adopted by him in the carrying out of his functions (except in so far as the contract or a notice under subsection (2) otherwise provides); and
(c)shall be entitled to be indemnified in respect of that liability, and to have his remuneration and expenses defrayed, out of the property of the company which is in his custody or under his control.
(2)  Where a contract entered into by the company is adopted by the judicial manager, he may, by notice given to the other party, disclaim any personal liability under that contract.
(3)  For the purposes of this section the judicial manager is not to be taken to have adopted a contract entered into by the company by reason of anything done or omitted to be done within 28 days after the making of the judicial management order.
Vacation of office
227J.—(1)  The judicial manager of a company may at any time be removed from office by order of the Court and may resign his office by giving notice of his resignation to the Court.
(2)  The judicial manager of a company shall vacate office if —
(a)being an approved company auditor at the time of his appointment, he ceases to be approved as such; or
(b)the judicial management order is discharged.
Information to be given by and to judicial manager
227K.—(1)  Where a judicial management order has been made, the judicial manager shall —
(a)forthwith send to the Registrar a copy of the order;
(b)forthwith send to the company and publish a notice of the order; and
(c)within 28 days after the making of the order, unless the Court otherwise directs, send such a notice to all creditors of the company (so far as he is aware of the addresses),
and the Registrar shall enter the copy of the order in his records of the company.
(2)  A statement as to the affairs of the company shall be made out and submitted to the judicial manager in accordance with section 227L within 21 days after receipt by the company of the notice of the judicial management order. Any longer period allowed by the judicial manager shall not exceed two months.
(3)  If a person, without reasonable excuse, fails to comply with this section he shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $5,000 and also to a default penalty.
Company’s statement of affairs
227L.—(1)  The company’s statement of affairs required by section 227K to be submitted to the judicial manager shall show as at the date of the judicial management order —
(a)the particulars of the company’s assets, debts and liabilities;
(b)the names and addresses of its creditors;
(c)the securities held by them respectively;
(d)the dates when the securities were respectively given; and
(e)such further or other information as may be prescribed.
(2)  The statement shall be submitted by, and be verified by, affidavit of one or more of the persons who are, at the date of the judicial management order, the directors and by the person who is at that date the secretary of the company, or by such of the persons mentioned in subsection (3) as the judicial manager may require to submit and verify the statement.
(3)  The persons referred to in subsection (2) are —
(a)those who are or have been officers of the company;
(b)those who have taken part in the company’s formation at any time within one year before the date of the judicial management order;
(c)those who are in the company’s employment, or have been in its employment, and are in the judicial manager’s opinion capable of giving the information required,
and in this subsection “employment” includes employment under a contract for services.
(4)  If a person, without reasonable excuse, fails to comply with this section, he shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $10,000 and also to a default penalty.
(5)  Any statement of affairs prepared under this section may be used in evidence against any person making or concurring in making it.
Statement of proposals
227M.—(1)  Where a judicial management order has been made, the judicial manager shall, within 90 days (or such longer period as the Court may allow) after the making of the order —
(a)send to the Registrar and (so far as he is aware of their addresses) to all creditors a statement of his proposals for achieving one or more of the purposes mentioned in section 227B(1)(b) for whose achievement the order was made; and
(b)lay a copy of the statement before a meeting of the company’s creditors summoned for the purpose on not less than 14 days’ notice.
(2)  The judicial manager shall also, within 90 days (or such longer period as the Court may allow) after the making of the order, either —
(a)send a copy of the statement (so far as he is aware of their addresses) to all members of the company; or
(b)publish a notice stating an address to which members of the company should write for copies of the statement to be sent to them free of charge.
Consideration of proposals by creditors’ meeting
227N.—(1)  A meeting of creditors, summoned under section 227M, shall decide within 30 days (or such longer period as the Court may allow) whether to approve the judicial manager’s proposals.
(2)  At such meeting the majority of creditors, present and voting either in person or by proxy that represent in number three-quarters in value of the creditors whose claims have been accepted by the judicial manager, may approve the proposals with modifications but shall not do so unless the judicial manager consents to each modification.
(3)  The judicial manager shall report the result of the meeting to the Court and shall give notice of that result to the Registrar and to such other persons or bodies as the Court may approve.
(4)  If a report is given to the Court under subsection (3) that the meeting has declined to approve the judicial manager’s proposals (with or without modifications), the Court may by order discharge the judicial management order and make such consequential provision as it thinks fit, or adjourn the hearing conditionally or unconditionally, or make an interim order or any other order that it thinks fit.
(5)  Where the judicial management order is discharged, the judicial manager shall forthwith send to the Registrar a copy of the order effecting the discharge.
(6)  If the judicial manager, without reasonable excuse, fails to comply with subsection (5) he shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $5,000 and also to a default penalty.
Committee of creditors
227O.—(1)  Where a meeting of creditors summoned under section 227M has approved the judicial manager’s proposals (with or without modifications), the meeting may, if it thinks fit, establish a committee to exercise the functions conferred on it under subsection (2).
(2)  If such a committee is established, the committee may require the judicial manager to attend before it and furnish it with such information relating to the carrying out by him of his functions as it may reasonably require.
Duty to manage company’s affairs, etc., in accordance with approved proposals
227P.—(1)  Where the judicial manager’s proposals have been approved by a meeting of creditors summoned under section 227M, then, subject to any order under section 227R, it shall be the duty of the judicial manager to manage the affairs, business and property of the company in accordance with the proposals as from time to time revised by him.
(2)  Where the judicial manager proposes to make substantial revisions of his proposals as so approved, he shall —
(a)send to all creditors of the company (so far as he is aware of their addresses) a statement of his proposed revisions; and
(b)lay a copy of the statement before a meeting of the company’s creditors summoned for the purpose on not less than 14 days’ notice,
and shall not make the proposed revisions unless they are approved by the majority of creditors present and voting in person or by proxy that represent in number three-quarters in value of the creditors at the meeting whose claims have been accepted by the judicial manager.
(3)  The judicial manager shall also either —
(a)send a copy of the statement (so far as he is aware of their addresses) to all members of the company; or
(b)publish a notice stating an address to which members of the company should write for copies of the statement to be sent to them free of charge.
(4)  A meeting of creditors summoned under subsection (2) may approve the proposed revisions with modifications but shall not do so unless the judicial manager consents to each modification.
(5)  After the conclusion of a meeting summoned under subsection (2), the judicial manager shall give notice of the result of the meeting to the Registrar or to such other persons or bodies as the Court may approve.
Duty to apply for discharge of judicial management order
227Q.—(1)  The judicial manager of a company shall apply to the Court for the judicial management order to be discharged if it appears to him that the purpose or each of the purposes specified in the order either has been achieved or is incapable of achievement.
(2)  On the hearing of an application under this section, the Court may by order discharge the judicial management order and make such consequential provision as it thinks fit, or adjourn the hearing conditionally or unconditionally, or make an interim order or any other order it thinks fit.
(3)  Where the judicial management order is discharged, the judicial manager shall forthwith send to the Registrar a copy of the order effecting the discharge.
(4)  Where a judicial management order has been discharged under this Part or where a person ceases to be a judicial manager pursuant to section 227J, the judicial manager may apply to the Court for his release and the Court may, if it thinks fit, make an order releasing him from liability in respect of any act or omission by him in the management of the company or otherwise in relation to his conduct as judicial manager but any such release shall not relieve him from liability for any misapplication or retention of money or property of the company or for which he has become accountable or from any law to which he would be subject in respect of negligence, default, misfeasance, breach of trust or breach of duty in relation to the company.
Protection of interests of creditors and members
227R.—(1)  At any time when a judicial management order is in force, a creditor or member of the company may apply to the Court by petition for an order under this section on the ground —
(a)that the company’s affairs, business and property are being or have been managed by the judicial manager in a manner which is or was unfairly prejudicial to the interests of its creditors or members generally or of some part of its creditors or members (including at least himself); or
(b)that any actual or proposed act or omission of the judicial manager is or would be so prejudicial.
(2)  On a petition for an order under this section, the Court may make such order as it thinks fit for giving relief in respect of the matters complained of, or adjourn the hearing conditionally or unconditionally, or make an interim order or any other order that it thinks fit.
(3)  Subject to subsection (4), an order under this section may —
(a)regulate the future management by the judicial manager of the company’s affairs, business and property;
(b)require the judicial manager to refrain from doing or continuing an act complained of by the petitioner or to do an act which the petitioner has complained he has omitted to do;
(c)require the summoning of a meeting of creditors or members for the purpose of considering such matters as the Court may direct;
(d)discharge the judicial management order and make such consequential provision as it thinks fit.
(4)  An order under this section shall not prejudice or prevent the implementation of any composition or scheme approved under section 210.
(5)  Where the judicial management order is discharged, the judicial manager shall forthwith send to the Registrar a copy of the order effecting the discharge.
(6)  If the judicial manager, without reasonable excuse, fails to comply with subsection (5) he shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $5,000 and also to a default penalty.
Undue preference in the case of judicial management
227S.—(1)  A settlement, a conveyance or transfer of property, a charge on property, a payment made or an obligation incurred by a company which if it had been made or incurred by a natural person would in the event of his becoming a bankrupt be void as against the Official Assignee shall, in the event of the company being placed under judicial management, be void as against the judicial manager.
(2)  For the purposes of subsection (1) the date that corresponds with the date of the petition in bankruptcy in the case of a natural person and the date on which a person is adjudged bankrupt is the date on which a petition for a judicial management order is made.
Delivery and seizure of property
227T.—(1)  Where any of the persons mentioned in subsection (2) has in his possession or control any property, books, papers or records to which the company appears to be entitled, the Court may require that person forthwith (or within such period as the Court may direct) to pay, deliver, convey, surrender or transfer the property, books, papers or records to the judicial manager.
(2)  The persons referred to in subsection (1) are —
(a)a contributory or member of the company;
(b)any person who has previously held office as receiver or receiver and manager of the company’s property; and
(c)any trustee for, or any banker, agent or officer of, the company.
(3)  Where —
(a)the judicial manager seizes or disposes of any property which is not the property of the company; and
(b)at the time of seizure or disposal the judicial manager believes, and has reasonable grounds for believing, that he is entitled (whether in pursuance of an order of the Court or otherwise) to seize or dispose of that property,
the judicial manager shall not be liable to any person in respect of any loss or damage resulting from the seizure or disposal except in so far as that loss or damage is caused by the negligence of the judicial manager and the judicial manager shall have a lien on the property, or the proceeds of its sale, for such expenses as were incurred in connection with the seizure or disposal.
Duty to co-operate with judicial manager
227U.—(1)  Each of the persons mentioned in subsection (2) shall —
(a)give to the judicial manager such information concerning the company and its promotion, formation, business, dealings, affairs or property as the judicial manager may at any time after the date of the judicial management order reasonably require; and
(b)attend on the judicial manager at such times as the judicial manager may reasonably require.
(2)  The persons referred to in subsection (1) are —
(a)those who are or have at any time been officers of the company;
(b)those who have taken part in the formation of the company at any time within one year before the date of the judicial management order; and
(c)those who are in the employment of the company, or have been in its employment, and are, in the judicial manager’s opinion, capable of giving information which he requires.
(3)  If a person, without reasonable excuse, fails to comply with any obligation imposed by this section, he shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $10,000 and also to a default penalty.
Inquiry into company’s dealings, etc.
227V.—(1)  The Court may, on the application of the judicial manager, summon to appear before it —
(a)any officer of the company;
(b)any person known or suspected to have in his possession any property of the company or supposed to be indebted to the company; or
(c)any person whom the Court thinks capable of giving information concerning the promotion, formation, business, dealings, affairs or property of the company,
and the Court may require any such person as is mentioned in paragraphs (a) to (c) to submit an affidavit to the Court containing an account of his dealings with the company or to produce any books, papers or other records in his possession or under his control relating to the company or the matters mentioned in paragraph (c).
(2)  In a case where a person, without reasonable excuse, fails to appear before the Court when he is summoned to do so under this section or there are reasonable grounds for believing that a person has absconded, or is about to abscond, with a view to avoiding his appearance before the Court under this section, the Court may, for the purpose of bringing that person and anything in his possession before the Court, cause a warrant to be issued to a police officer —
(a)for the arrest of that person; and
(b)for the seizure of any books, papers, records, money or goods in that person’s possession,
and may authorise a person arrested under such a warrant to be kept in custody, and anything seized under such a warrant to be held until that person is brought before the Court under the warrant or until such other time as the Court may order.
(3)  Any person who appears or is brought before the Court under this section may be examined on oath, either orally or by interrogatories, concerning the company or the matters mentioned in subsection (1)(c).
(4)  If it appears to the Court, on consideration of any evidence obtained under this section, that any person has in his possession any property of the company, the Court may, on the application of the judicial manager, order that person to deliver the whole or any part of the property to the judicial manager at such time, in such manner and on such terms as the Court thinks fit.
(5)  If it appears to the Court, on consideration of any evidence obtained under this section, that any person is indebted to the company, the Court may, on the application of the judicial manager, order that person to pay to the judicial manager, at such time and in such manner as the Court may direct, the whole or any part of the amount due, whether in full discharge of the debt or otherwise, as the Court thinks fit.
(6)  The Court may, if it thinks fit, order that any person, who if within Singapore would be summoned to appear before it under this section, to be examined in a place outside Singapore.
Application of certain provisions in Parts VII and X to a company under judicial management
227W.  At any time when a judicial management order is in force in relation to a company under judicial management —
(a)section 210 shall apply as if for subsections (1) and (2) thereof there were substituted the following:
(1)  Where a compromise or arrangement is proposed between a company and its creditors, the Court may on the application of the judicial manager order a meeting of creditors to be summoned in such manner as the Court directs.
(2)  If three-fourths in value of the creditors present and voting either in person or by proxy at the meeting agree to any compromise or arrangement, the compromise or arrangement, if approved by the Court, is binding on all the creditors and on the judicial manager.”;
(b)sections 337, 340, 341 and 342 shall apply as if the company under judicial management were a company being wound up and the judicial manager were the liquidator, but this shall be without prejudice to the power of the Court to order that any other section in Part X shall apply to a company under judicial management as if it applied in a winding up by the Court and any reference to the liquidator shall be taken as a reference to the judicial manager and any reference to a contributory as a reference to a member of the company.”.
Amendment of section 229
47.  Section 229 of the Companies Act is amended by deleting the definition of “affairs”.
Amendment of section 230
48.  Section 230(a) of the Companies Act is amended by deleting the words “Division 5” and substituting the words “Division 6”.
Amendment of section 231
49.  Section 231(4) of the Companies Act is amended by deleting the words “requested the appointment of the inspector” and substituting the words “is convicted on a prosecution brought under section 233 (3) or who is ordered to pay damages or restore property in proceedings under section 233 (4)”.
Amendment of section 232
50.  Section 232 of the Companies Act is amended —
(a)by deleting the full-stop at the end of subsection (1)(b) and substituting the word “; or”; and
(b)by inserting immediately after subsection (1)(b), the following paragraph:
(c)in any case on the application of a company in pursuance of a special resolution.”.
Amendment of section 233
51.  Section 233 of the Companies Act is amended —
(a)by inserting, immediately after the word “shall” in the seventh line and in the penultimate line of subsection (1), the words “subject to subsection (1B)”;
(b)by inserting, immediately after subsection (1), the following subsections:
(1A)  Subject to subsections (1B) and (1C), the Minister shall give a copy of a report made under this Part to each person to whom in the opinion of the Minister the report ought to be given by reason that it relates to the affairs of that person to a material extent.
(1B)  The Minister is not bound to furnish a company, an applicant or any other person with a copy of the report or any part thereof if he is of the opinion that there is good reason for not divulging the contents of the report or any part thereof.
(1C)  Subject to subsection (1D), the Minister shall not give a copy of a report made under this Part to a person under subsection (1A) if he believes that legal proceedings that have been or, in his opinion, might be instituted, might be unduly prejudiced by giving the report to that person.
(1D)  A court before which legal proceedings are brought against a person for or in respect of matters dealt with in a report under this Part may order that a copy of the report or part thereof shall be given to that person.”; and
(c)by inserting, immediately after the word “published” at the end of subsection (2), the words “but shall refrain from so doing if the Attorney-General has certified in writing that publication of the report would be prejudicial to the administration of justice”.
Repeal of section 234
52.  Section 234 of the Companies Act is repealed.
Amendment of section 236
53.  Section 236 of the Companies Act is amended —
(a)by inserting, immediately after subsection (4), the following subsection:
(4A)  If an inspector has reasonable grounds for believing that a director or past director of the company or of a corporation which is or has at any time been deemed to be or to have been related to that company by virtue of section 6 whose affairs the inspector is investigating maintains or has maintained a bank account of any description, whether alone or jointly with another person and whether in Singapore or elsewhere, into or out of which there has been paid any money which has been in any way connected with any act or omission or series of acts or omissions, which on the part of that director constituted misconduct (whether fraudulent or not towards that company or that related company or its members) an inspector may require the director to produce to him all documents in the director’s possession or under his control relating to that bank account.”; and
(b)by inserting, immediately after the word “corporation” in the sixth line of subsection (5), the words “or that officer or agent is a director or past director to whom subsection (4A) applies, if he fails to comply with a requirement of an inspector under that subsection”.
Amendment of section 243
54.  Section 243(5)(b) of the Companies Act is amended by deleting the word “shall” in the seventh line and substituting the words “may, if he thinks fit,”.
Amendment of section 244
55.  Section 244(1) of the Companies Act is amended —
(a)by deleting the dash after the word “believe” in the fifth line;
(b)by deleting paragraphs (a) and (b); and
(c)by deleting the words “to give him any information which he has or can reasonably be expected to obtain” in the eleventh and twelfth lines, and substituting the words “to have or to be able to obtain any information”.
Amendment of section 245
56.  Section 245(1) of the Companies Act is amended by deleting the words “and that the difficulty is due wholly or mainly to the unwillingness of the persons concerned or any of them to assist the investigation as required by this Act,” in the fourth to the seventh lines.
Amendment of section 253
57.  Section 253 of the Companies Act is amended —
(a)by inserting, immediately after paragraph (e) of subsection (1), the following paragraph:
(f)the judicial manager appointed pursuant to Part VIIIA;”;
(b)by renumbering the existing paragraphs (f) and (g) as paragraphs (g) and (h) respectively.
Amendment of section 271
58.  Section 271 of the Companies Act is amended —
(a)by inserting, immediately after the word “Court” in the third line of subsection (1), the words “or if the liquidator is not the Official Receiver, to the Official Receiver”; and
(b)by inserting, immediately after the word “reports” in the second line of subsection (2), the words “to the Court or to the Official Receiver if he is not the liquidator”.
Amendment of section 293
59.  Section 293(1) of the Companies Act is amended —
(a)by inserting, immediately after the word “shall” in the fourth line, the words “, in the case of a members’ voluntary winding up,”; and
(b)by deleting the word “written” in the sixth line and substituting the word “statutory”.
Amendment of section 328
60.  Section 328 of the Companies Act is amended —
(a)by deleting the words “4 months” in subsection (1)(b) and substituting the words “12 months”;
(b)by deleting the word “fourthly” in subsection (1)(d) and substituting the word “fifthly”, and by deleting the word “fifthly” in subsection (1)(e) and substituting the word “fourthly”, and by renumbering subsection (1)(d) as (1)(e) and subsection (1)(e) as (1)(d); and
(c)by inserting, immediately after the word “include” in the third line of subsection (2), the words “all arrears of”, and by inserting, immediately after the word “be” at the end of that subsection, the words “, and any gratuity or retrenchment benefit payable to an employee on termination of his employment”.
Amendment of section 342
61.  Section 342(4) of the Companies Act is amended by deleting the words “may, if he thinks expedient, apply to the Court for an order conferring on him or any person designated by him for the purpose with respect to the company concerned” and substituting the words “for the purposes of such an investigation shall have”.
Repeal and re-enactment of section 365
62.  Section 365 of the Companies Act is repealed and the following section substituted therefor:
Foreign companies to which this Division applies
365.  This Division applies to a foreign company which intends to have a place of business or to carry on business in Singapore.”.
Amendment of section 368
63.  Section 368(1)(e) of the Companies Act is amended —
(a)by inserting, immediately after the word “more” in the sixth line, the word “natural”; and
(b)by deleting the words “not including a foreign company,” in the seventh and eighth lines.
Repeal and re-enactment of section 392
64.  Section 392 of the Companies Act is repealed and the following section substituted therefor:
Irregularities
392.—(1)  In this section, unless the contrary intention appears a reference to a procedural irregularity includes a reference to —
(a)the absence of a quorum at a meeting of a corporation, at a meeting of directors or creditors of a corporation or at a joint meeting of creditors and members of a corporation; and
(b)a defect, irregularity or deficiency of notice or time.
(2)  A proceeding under this Act is not invalidated by reason of any procedural irregularity unless the Court is of the opinion that the irregularity has caused or may cause substantial injustice that cannot be remedied by any order of the Court and by order declares the proceeding to be invalid.
(3)  A meeting held for the purposes of this Act, or a meeting notice of which is required to be given in accordance with the provisions of this Act, or any proceeding at such a meeting, is not invalidated by reason only of the accidental omission to give notice of the meeting or the non-receipt by any person of notice of the meeting, unless the Court, on the application of the person concerned, a person entitled to attend the meeting or the Registrar, declares proceedings at the meeting to be void.
(4)  Subject to the following provisions of this section and without limiting the generality of any other provision of this Act, the Court may, on application by any interested person, make all or any of the following orders, either unconditionally or subject to such conditions as the Court imposes:
(a)an order declaring that any act, matter or thing purporting to have been done, or any proceeding purporting to have been instituted or taken, under this Act or in relation to a corporation is not invalid by reason of any contravention of, or failure to comply with, a provision of this Act or a provision of any of the constituent documents of a corporation;
(b)an order directing the rectification of any register kept by the Registrar under this Act;
(c)an order relieving a person in whole or in part from any civil liability in respect of a contravention or failure of a kind referred to in paragraph (a);
(d)an order extending the period for doing any act, matter or thing or instituting or taking any proceeding under this Act or in relation to a corporation (including an order extending a period where the period concerned expired before the application for the order was made) or abridging the period for doing such an act, matter or thing or instituting or taking such a proceeding,
and may make such consequential or ancillary orders as the Court thinks fit.
(5)  An order may be made under subsection (4)(a) or (b) notwithstanding that the contravention or failure referred to in the paragraph concerned resulted in the commission of an offence.
(6)  The Court shall not make an order under this section unless it is satisfied —
(a)in the case of an order referred to in subsection (4)(a) —
(i)that the act, matter or thing, or the proceeding, referred to in that paragraph is essentially of a procedural nature;
(ii)that the person or persons concerned in or party to the contravention or failure acted honestly; or
(iii)that it is in the public interest that the order be made;
(b)in the case of an order referred to in subsection (4)(c) — that the person subject to the civil liability concerned acted honestly; and
(c)in every case — that no substantial injustice has been or is likely to be caused to any person.”.
Amendment of section 400
65.  Section 400 of the Companies Act is amended —
(a)by deleting subsections (3), (4) and (8) and substituting the following subsections:
(3)  A person shall not make an offer in writing to any member of the public (not being a person whose ordinary business it is to purchase or sell shares, whether as principal or agent) of any shares for purchase unless the offer is accompanied by —
(a)a statement in writing (signed by the person making the offer and dated) containing such particulars as are required by this section to be included in the statement and otherwise complying with the requirements of this section;
(b)in the case of shares in a corporation formed or incorporated outside Singapore, by such a statement or by a prospectus that complies with this Act.
(4)  Subsection (3) does not apply —
(a)where the shares to which the offer relates are shares of a class that are listed for quotation on the stock market of a stock exchange in Singapore and the offer so states, specifying the stock exchange;
(b)where the shares to which the offer relates are shares that a corporation has allotted or agreed to allot with a view to their being offered for sale to the public and the offer is made by a document that complies with all written laws and rules of law as to prospectuses;
(c)where the provisions of Division 1 or 5 of Part IV apply in relation to the offer and have been complied with;
(d)where the offer relates to an interest other than shares and debentures and is made by means of a statement in writing as required by Division 6 of Part IV; or
(e)where the offer relates to debentures of a corporation of the kind referred to in section 44(6).
(5)  The statement referred to in subsection (3) shall not contain any matter other than the particulars required by this section to be included in the statement, and shall not be in characters smaller or less legible than any characters used in the offer or in any document sent with the offer.
(6)  The statement referred to in subsection (3) shall contain particulars as to —
(a)whether the person making the offer is acting as principal or agent and, if as agent —
(i)the name of his principal;
(ii)an address in Singapore where that principal can be served with process; and
(iii)particulars as to the remuneration payable by the principal to the agent;
(b)the date on which and the place where the corporation was incorporated and the address of its registered or principal office in its place of incorporation and in Singapore;
(c)the authorised share capital of the corporation, its issued share capital, its paid-up capital and the classes into which its share capital is divided and the rights of each class of shareholders in respect of capital, dividends and voting;
(d)the dividends (if any) paid by the corporation in respect of each class of shares during each of the 5 financial years immediately preceding the offer and, if no dividend has been paid in respect of shares of any particular class during any of those years, a statement to that effect;
(e)the total amount of any debentures issued by the corporation and outstanding at the date of the statement, together with the rate of interest payable on those debentures;
(f)the names and addresses of the directors;
(g)whether or not the shares offered are fully paid up and, if not, to what extent they are paid up;
(h)whether or not the shares are listed for quotation on the stock market of, or permission to deal in the shares on a stock market has been granted by, any stock exchange and, if so, the name of each such stock exchange;
(i)where the offer relates to units — the names and addresses of the persons in whom the shares represented by the units are vested, the date of, and the parties to, any document defining the terms on which those shares are held and an address in Singapore where that document or a copy of that document can be inspected; and
(j)the last audited balance-sheet of the corporation.
(7)  In subsection (6), “corporation” means the corporation by which the shares to which the statement relates were or are to be issued.
(8)  A person shall not, whether by appointment or otherwise, go from place to place making offers to the public or any member of the public, being offers of shares in a corporation that has not been formed, for subscription or purchase.
(9)  A person shall not make an offer to any member of the public, being an offer of any shares in a corporation that has not been formed, for subscription or purchase.”;
(b)by deleting the words “whether a corporation in existence or to be formed” in the second line of subsection (9) and by deleting “5” in the penultimate line of that subsection and substituting “6”;
(c)by renumbering subsections (5), (6), (7) and (9) as subsections (10), (11), (12) and (13) respectively; and
(d)by deleting subsection (10) and substituting the following subsection:
(14)  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 and a reference to an offer in writing of shares shall be construed as including an offer by means of broadcasting, television or cinematograph, but, where an offer is made by means of broadcasting, television or cinematograph, the statement or prospectus by which the offer is required to be accompanied by virtue of subsection (3) shall be deemed to accompany the offer if —
(a)the statement or prospectus is prepared by the person on whose behalf the offer is made;
(b)the public are informed at the same time and by the same means as that by which the offer is made that a copy of the statement or prospectus will be supplied on request being made at a specified address; and
(c)where a request for a copy of a statement or prospectus is made at that address within one month after the offer was made — the person making the request is supplied with a copy within 7 days after the request was made.”; and
(e)by renumbering subsection (11) as (15).
Amendment of section 405
66.  Section 405 of the Companies Act is amended by deleting subsection (1) and substituting the following subsection:
(1)  If any person uses any name or title or trades or carries on business under any name or title of which “Limited”, “Berhad”, “Company”, “Corporation” or “Incorporated” or any abbreviation, imitation or translation of any of those words is the final word, or in any way holds out that the business is registered or incorporated that person shall, unless at that time the business was duly incorporated under this Act or registered under the Business Registration Act 1973 (Act 36 of 1973), 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 or to both.”.
Amendment of section 409
67.  Section 409(6) of the Companies Act is amended by deleting the words “admits the offence and”.
New section 409A
68.  The Companies Act is amended by inserting, immediately after section 409, the following section:
Injunctions
409A.—(1)  Where a person has engaged, is engaging or is proposing to engage in any conduct that constituted, constitutes or would constitute a contravention of this Act, the Court may, on the application of —
(a)the Registrar; or
(b)any person whose interests have been, are or would be affected by the conduct,
grant an injunction restraining the first-mentioned person from engaging in the conduct and, if in the opinion of the Court it is desirable to do so, requiring that person to do any act or thing.
(2)  Where a person has refused or failed, is refusing or failing, or is proposing to refuse or fail, to do an act or thing that he is required by this Act to do, the Court may, on the application of —
(a)the Registrar; or
(b)any person whose interests have been, are or would be affected by the refusal or failure to do that act or thing,
grant an injunction requiring the first-mentioned person to do that act or thing.
(3)  Where an application is made to the Court for an injunction under subsection (1), the Court may, if in the opinion of the Court it is desirable to do so, before considering the application, grant an interim injunction restraining a person from engaging in conduct of the kind referred to in subsection (1) pending the determination of the application.
(4)  The Court may rescind or vary an injunction granted under subsection (1), (2) or (3).
(5)  Where an application is made to the Court for the grant of an injunction restraining a person from engaging in conduct of a particular kind, the power of the Court to grant the injunction may be exercised —
(a)if the Court is satisfied that the person has engaged in conduct of that kind — whether or not it appears to the Court that the person intends to engage again, or to continue to engage, in conduct of that kind; or
(b)if it appears to the Court that, in the event that an injunction is not granted, it is likely the person will engage in conduct of that kind — whether or not the person has previously engaged in conduct of that kind and whether or not there is an imminent danger of substantial damage to any person if the first-mentioned person engages in conduct of that kind.
(6)  Where an application is made to the Court for a grant of an injunction requiring a person to do a particular act or thing, the power of the Court to grant the injunction may be exercised —
(a)if the Court is satisfied that the person has refused or failed to do that act or thing — whether or not it appears to the Court that the person intends to refuse or fail again, or to continue to refuse or fail, to do that act or thing; or
(b)if it appears to the Court that, in the event that an injunction is not granted, it is likely the person will refuse or fail to do that act or thing — whether or not the person has previously refused or failed to do that act or thing and whether or not there is an imminent danger of substantial damage to any person if the first-mentioned person refused or fails to do that act or thing.
(7)  Where the Registrar makes an application to the Court for the grant of an injunction under this section, the Court shall not require the Registrar or any other person, as a condition of granting an interim injunction, to give any undertakings as to damages.
(8)  Where the Court has power under this section to grant an injunction restraining a person from engaging in particular conduct, or requiring a person to do a particular act or thing, the Court may, either in addition to or in substitution for the grant of the injunction, order that person to pay damages to any other person.”.
Amendment of Fourth Schedule
69.  The Fourth Schedule is amended —
(a)by inserting, immediately after regulation 72(c), the following paragraph:
(ca)becomes disqualified from being a director by virtue of section 148, 149, 154 or 155;”; and
(b)by inserting, immediately before the word “resigns” in regulation 72(e), the words “, subject to section 145,”.
Repeal and re-enactment of Ninth Schedule
70.  The Companies Act is amended by repealing the Ninth Schedule and substituting therefor the following Schedule:
NINTH SCHEDULE
Sections 201(14), (18) and 373(5).
Accounts and Consolidated Accounts
(1)  In this Schedule —
(a)“reserve” does not include any amount written off or retained by way of providing for depreciation, renewal or diminution in value of assets or retained by way of providing for any known liability, or any amount set aside for the purpose of its being used to counter the effect of undue fluctuations in charges for taxation;
(b)a reference to a financial year in relation to consolidated accounts of a holding company is — where the financial year of any one or more of the companies in the group of companies does not end on the date on which the financial year of the holding company ends — a reference to the financial year of the holding company and the financial year of each other company in the group of companies that does not end on that date.
(2)  The term “reserve” shall not be included in any accounts or consolidated accounts to describe any amount which is excluded by subparagraph (1) from the meaning of that term for the purposes of this Schedule.
(1)  There shall be shown separately in the accounts or consolidated accounts (whether by way of note or otherwise), in addition to any other matters necessary to present a true and fair view of the profit or loss of the company, or of the company and its subsidiaries —
(a)the amounts of income received or due and receivable as dividends from —
(i)quoted investments in subsidiaries;
(ii)unquoted investments in subsidiaries;
(iii)quoted equity investments in companies other than subsidiaries;
(iv)unquoted equity investments in companies other than subsidiaries;
(v)other quoted investments; and
(vi)other unquoted investments;
(b)the amounts of income received, or due and receivable, as interest on debentures, deposits, loans or advances, from —
(i)the holding company;
(ii)subsidiaries; and
(iii)other related corporations;
(c)the amount of —
(i)any profit arising from the sale of assets (other than current assets); and
(ii)any profit arising from the revaluation of assets (other than current assets),
and, in respect of each such profit, a statement whether it has been brought into account in determining the net amount of the profit or loss of the company or the company and its subsidiaries;
(d)the amount of any other profit arising otherwise than in the ordinary course of business;
(e)the amounts of interest paid, or due and payable, on debentures, deposits, loans or advances or otherwise to —
(i)the holding company;
(ii)subsidiaries;
(iii)other related corporations; and
(iv)other persons;
(f)the amount of —
(i)any loss arising from the sale of assets (other than current assets); and
(ii)any loss arising from the revaluation of assets (other than current assets),
and, in respect of each such loss, a statement whether it has been brought into account in determining the net amount of the profit or loss of the company or of the company and its subsidiaries;
(g)the amount of any other loss arising otherwise than in the ordinary course of business;
(h)the amount charged for, or set aside to a provision for, depreciation, diminution in value or amortisation of —
(i)fixed assets;
(ii)investments; and
(iii)intangible assets;
(i)the amount charged for, or set aside for, the renewal or replacement of fixed assets;
(j)in respect of each class of debtors’ accounts shown separately in the accounts or consolidated accounts —
(i)the amount of bad debts written off in the profit and loss account; and
(ii)the amount of bad debts written off against any provision, reserve or other account, stating the name of the provision, reserve or account and the amount written off against it;
(k)in respect of each class of debtors’ accounts shown separately in the accounts or consolidated accounts, the amount set aside to any provision for doubtful debts;
(l)the total of the amount paid to the directors as remuneration for their services, inclusive of all fees, percentages, bonuses and commissions or other emoluments paid to or receivable by them by or from the company or by or from any subsidiary of the company, and inclusive of commission paid or payable for subscribing or agreeing to subscribe or procuring or agreeing to procure subscriptions for any shares in or debentures of the company or of its holding company or any subsidiary of the company:
Provided that where a director or any firm of which the director is a member acts for the company in a professional capacity the amount paid to the director or to his firm for services rendered to the company in that capacity shall not be included in the aforesaid total but shall be shown separately whether by way of note or otherwise;
(m)the total of the amount paid to or receivable by the auditors as remuneration for their services as auditors, inclusive of all fees, percentages or other payments or consideration given, by or from the company or by or from any subsidiary of the company.
(2)  There shall also be shown in the accounts or consolidated accounts in respect of the financial year (whether by way of note or otherwise) the amount set aside for the payment of income tax attributable to the financial year and separately the amount attributable to succeeding years.
3.  There shall be shown in the accounts or consolidated accounts in respect of the financial year (whether by way of note or otherwise), separately —
(a)the amount of unappropriated profits or accumulated losses (however described) at the beginning of the financial year;
(b)the net amount of profit or loss after providing for payment of income tax attributable to the financial year;
(c)any amount set aside to any provision for the payment of income tax attributable to a period other than the financial year;
(d)any amount set aside or proposed to be set aside to any reserve stating the origin of that amount;
(e)any amount withdrawn, or proposed to be withdrawn, from any reserve;
(f)any amount set aside to a provision (other than a provision specifically provided for in this Schedule);
(g)any amount withdrawn from any provision where the amount withdrawn was not applied for the purposes of the provision;
(h)any amount set aside for redemption of share capital or of loans;
(i)the amount of dividends paid during the financial year and the amount of dividends proposed to be paid, excluding any amount shown in a profit and loss account or balancesheet relating to a previous financial year as an amount proposed to be paid by way of dividends;
(j)the amount of any appropriation or adjustment which affects the amount of unappropriated profits or accumulated losses at the end of the financial year; and
(k)the amount of unappropriated profits or accumulated losses (however described) at the end of the financial year.
4.  Where in accounts of a company or in group accounts the amount set aside for the payment of income tax attributable to the financial year differs, or but for compensatory items would differ, by more than 15% from the amount of income tax that would be payable by the company or by the company and its subsidiaries if its taxable income for that year were equal to the amount shown in or ascertainable from the accounts or group accounts as being the amount of the net profit or loss before provision is made for the payment of income tax attributable to that year, there shall be set out an explanation of the difference, including a statement of the major items responsible for the difference and the amount, or estimated amount, of those items.
(1)  There shall be shown separately in the accounts or consolidated accounts as at the end of the financial year (whether by way of note or otherwise) —
(a)the amount and particulars of authorised and issued capital, calls in arrear and paid-up capital, a distinction being drawn in those amounts and particulars between any different classes of shares;
(b)where any part of the capital consists of preference shares —
(i)the rate of dividend on each class of preference shares;
(ii)the amount of arrears of dividend on each class of preference shares;
(iii)whether the preference shares are cumulative, non-cumulative, participating or non-participating;
(iv)whether the preference shares are to be redeemed or at the option of the company are liable to be redeemed; and
(v)if the preference shares are to be redeemed or at the option of the company are liable to be redeemed — the date on or before which they are to be redeemed or are liable to be redeemed, the earliest date on which the company has power to redeem them, and the amount of the premium (if any) at which they are to be redeemed or are liable to be redeemed;
(c)the amount of capital which is not capable of being called up except in the event of, and for the purposes of, the winding up of the company;
(d)the amount of capital upon which interest has been paid out of capital during the financial year (and the rate of interest so paid);
(e)the amount of reserves of all descriptions, a separate amount being shown for each class;
(f)the amount of the share premium account;
(g)the amount of unappropriated profits or accumulated losses (if any) as shown under paragraph 3(k), any accumulated losses (insofar as they have not been written off) being shown as a deduction from the amount of paid-up capital and reserves;
(h)the amount and particulars of provisions, there being shown separately —
(i)the amount of any provision for depreciation, diminution in value or amortisation of assets shown as deductions from the amounts of the respective assets;
(ii)the amount of any provision for doubtful debts shown as deductions from the amounts of the respective debtors’ accounts to which the provision relates;
(iii)the amount of provision for income tax, a distinction being drawn between the amount provided for current liability and that provided for future liability, and any amount provided for the purpose of its being used to counter the effect of undue fluctuations in liability for income tax being shown separately; and
(iv)the amount and purpose of any other provision shown, if appropriate, as a deduction from the amount of the asset to which the provision relates.
(2)  There shall be shown in the accounts or consolidated accounts as at the end of the financial year (whether by way of note or otherwise) the amounts and descriptions of all current liabilities and non-current liabilities, under headings appropriate to the business of the company or of the company and its subsidiaries, and arranged in classes under those headings according to their nature or function in the business, the following being shown separately:
(a)bank loans;
(b)bank overdrafts;
(c)debentures held by —
(i)subsidiaries;
(ii)the holding company;
(iii)other related corporations; and
(iv)other persons;
(d)the amount due to trade creditors and on bills payable;
(e)other amounts payable to —
(i)subsidiaries;
(ii)the holding company; and
(iii)other related corporations;
(f)the aggregate amount, or estimated aggregate amount, and particulars of capital expenditure contracted for, so far as the amount has not been provided for;
(g)the amounts and descriptions of other liabilities and particulars of their nature.
(3)  There shall be shown in the accounts or consolidated accounts, if not otherwise shown, as at the end of the financial year (whether by way of note or otherwise), contingent liabilities, with a statement as to the general nature thereof and, so far as practicable, the maximum amount, or an estimate of the maximum amount, for which the company or the company and its subsidiaries could become liable in respect thereof.
(4)  There shall be shown separately in the accounts or consolidated accounts as at the end of the financial year (whether by way of note or otherwise) the amounts and descriptions of all fixed assets, intangible assets, current assets, investments and assets of any other kind, under headings appropriate to the business of the company or of the company and its subsidiaries, and arranged in classes under those headings according to their nature or function in the business, the following being shown separately —
(a)cash at bank and in hand;
(b)stock on hand;
(c)work in progress;
(d)government and other public debentures, stock and bonds;
(e)shares in —
(i)the holding company;
(ii)subsidiaries;
(iii)other related corporations; and
(iv)other corporations;
(f)debentures of —
(i)the holding company;
(ii)subsidiaries;
(iii)other related corporations; and
(iv)other corporations;
(g)the amount due from trade debtors and on bills receivable;
(h)other amounts receivable from —
(i)the holding company;
(ii)subsidiaries;
(iii)other related corporations; and
(iv)other persons;
(i)the total amount outstanding of any loans made, guaranteed or secured by the company or by the company and its subsidiaries, being loans made to the directors of the company or of a related corporation, or loans made to any other corporation in which a director or directors of the company, or of a related corporation, owns or own a controlling interest;
(j)the aggregate of the amounts of any items of goodwill and of any patents and trade marks, to the extent that they have not been written off;
(k)the amounts of each of the following, to the extent that they have not been written off:
(i)preliminary expenses;
(ii)expenses incurred in connection with any issue of shares or debentures;
(iii)sums paid by way of commission in respect of any shares or debentures;
(iv)sums allowed by way of discount in respect of debentures; and
(v)sums allowed by way of discount on any issue of shares; and
(l)the amounts and descriptions of other assets, with particulars of their nature.
(1)  In respect of the liabilities or contingent liabilities shown in the accounts or consolidated accounts being a liability the payment of which is secured by a charge on assets of the company or of the company and its subsidiaries, whether registered or unregistered, there shall be shown a statement that they are so secured and the extent to which they were secured, and such liabilities or contingent liabilities shall be distinguished from any other liabilities or contingent liabilities the payment of which are not so secured.
(2)  Current liabilities and current assets shall be clearly distinguished from other liabilities and assets.
(3)  Where by reason of the manner in which the records of a company were kept before the date of commencement of the Companies (Amendment) Act 1986 it is not possible to show separately the amounts of any classes of assets or liabilities required by this Schedule to be separately shown, there shall be shown the total amount of assets or liabilities of those classes acquired or incurred before that date, and the separate amounts of assets or liabilities of those classes acquired or incurred after that date.
(1)  In respect of all fixed assets, investments, stock on hand and work in progress shown in the balance-sheet there shall be stated the method of arriving at the amount thereof, and when more than one method is used a separate total shall be shown in respect of each of the methods used.
(2)  There shall be shown in respect of each class of fixed assets or investments referred to in the accounts or consolidated accounts —
(a)the cost thereof, or (at the option of the directors) where they have been valued, the amount thereof as so valued, and, where the valuation applies only to part of such a class, separate totals for such of the assets as have been valued and for the remainder of the assets of that class;
(b)the aggregate amount provided or written off for depreciation, diminution in value or amortisation in respect of each class or part of a class since the date of acquisition or valuation, as the case may be; and
(c)the difference between the amounts shown under items (a) and (b).
(3)  For the purposes of sub-paragraph (2), the net amount at which any assets stood in the company’s records at the date of commencement of the Companies (Amendment) Act 1986 (after deduction of the amounts previously provided or written off for depreciation, diminution in value or amortisation) shall, if the figures relating to the period before that date cannot be obtained without unreasonable expense or delay, be treated, until a valuation is made, as if it were the amount of a valuation of those assets made on the date of that date, and where any of those assets are sold, that net amount (less the net amount at which the assets sold stood in the records as at that date, or if no separate amount is available, their estimated value as at that date) shall be treated as if it were the amount of a valuation of the remaining assets made on that date.
(4)  Sub-paragraph (2)(b) and (c) does not apply to fixed assets the replacement of which is dealt with wholly or partly —
(a)by making any provision for renewal or replacement and charging the cost of renewal or replacement against that provision; or
(b)by charging the cost of renewal or replacement directly against revenue,
but in respect of those assets there shall be stated —
(c)the method by which their renewal or replacement is dealt with; and
(d)the aggregate amount of the provisions (if any) made for renewal or replacement and not used.
(5)  If any investments of a class for which paragraph 5(4) (d), (e) or (f) requires a separate amount to be shown are quoted on the Singapore Stock Exchange or a foreign stock exchange, a separate total shall be shown for the quoted investments of each class, and there shall also be shown the aggregate quoted market value, calculated on the official quotation of that exchange, of the quoted investments of each class.
(6)  Where the amount of any fixed asset or investment (other than an investment the quoted market value of which has been included in an aggregate market value in accordance with sub-paragraph (5)) is shown at a valuation or at a valuation less amounts written off, there shall be shown (whether by way of note or otherwise) the date of the valuation, and whether the valuation was made by an officer of the company or of a related corporation or by a person not being such an officer.
(7)  If the valuation referred to in sub-paragraph (6) was made by a person not being such an officer, the name of the person who valued it and particulars of his qualifications shall be shown in the first accounts in which reference is made to the valuation.
(8)  For the purposes of sub-paragraph (6), the expression “officer’s valuation” may be used to indicate a valuation made by an officer of the company or of a related corporation, and the expression “independent valuation” may be used to indicate a valuation made by a person not being such an officer.
(9)  In addition to any other information required to be shown, there shall be shown separately (whether by way of note or otherwise), in respect of land or interests in land acquired or held for sale or resale to the extent to which they have not been written off —
(a)the total cost of acquisition (exclusive of any costs of surveys, roads and drainage and other development expenses);
(b)the total of all development costs incurred to date; and
(c)the total of all rates, property taxes, interest and other similar overhead expenditure capitalised.
8.  There shall be shown (whether by way of note or otherwise) in the balance-sheet of every company which is a borrowing corporation or a guarantor corporation a schedule setting out, separately, estimates of the amounts payable by, and the debts payable to, the company —
(a)not later than two years;
(b)later than two years but not later than 5 years; and
(c)later than 5 years,
after the end of the financial year.
(1)  Consolidated accounts of a holding company shall state (whether by way of note or otherwise) —
(a)the name and place of incorporation of each subsidiary, and if any business of the subsidiary is carried on in a country other than Singapore, the name of that country;
(b)the amount of the holding company’s investment in each class of the share capital of each subsidiary;
(c)the percentage of each class of the shares in each subsidiary held by the holding company; and
(d)where the financial year of a subsidiary does not coincide with the financial year of the holding company, the date on which the financial year of the holding company, the date on which the financial year of the subsidiary ends.
(2)  Where any consolidated accounts are to be laid before a holding company at its Annual General Meeting, transactions and balances between the corporations covered by the consolidated accounts shall be eliminated in determining any amounts to be stated in the consolidated accounts.
(3)  Subject to sub-paragraph (4) where separate accounts of a subsidiary are to be laid before the holding company at its Annual General Meeting as part of the consolidated accounts, the accounts of the subsidiary shall, as far as practicable, be in the same form as the accounts of the holding company.
(4)  In the case of a subsidiary incorporated outside Singapore (whether or not it has established a place of business in Singapore) it shall be sufficient compliance with sub-paragraph (3) if the accounts of the subsidiary —
(a)are in such form;
(b)are reported on by an auditor in such manner;
(c)contain such particulars; and
(d)include or are accompanied by such documents, if any, as is or are required by the law of its place of incorporation concerning accounts to be laid before the subsidiary in general meeting.
(5)  Where consolidated accounts are prepared, otherwise than as one set of consolidated accounts covering the group, the directors of the holding company shall certify on, or in a certificate attached to, the accounts —
(a)that the preparation of one such set of consolidated accounts is impracticable or that it is preferable, in the interests of the shareholders, that the accounts be prepared in the form in which they are prepared (as the case may be), for reasons to be stated in the certificate; and
(b)that, in the opinion of the directors, the accounts so prepared are not significantly affected by transactions and balances between the corporations covered by the accounts, except to the extent stated in any notes forming part of the accounts.
(6)  Where any accounts included in consolidated accounts laid before a holding company at its Annual General Meeting are presented in a form or grouping different from that in which the immediately preceding consolidated accounts (if any) were so laid, the directors shall certify on, or in a certificate attached to, the accounts the names of the corporations the accounts of which have been so presented and the reasons for presenting them in that form or grouping.
(7)  A certificate under sub-paragraph (5) or (6) shall be signed by not less than two directors.
10.  All amounts shown in the accounts or consolidated accounts shall be expressed in Singapore currency, and where any conversion has been made otherwise than on the basis of the rate of exchange current at the end of the financial year of the company or holding company an explanation of the methods used in calculating the conversion shall be given.
11.  Except in the case of the first accounts after the incorporation of the company and in the case of the first consolidated accounts after the company becomes a holding company, there shall be shown —
(a)in every balance-sheet and in all notes attached to that balance-sheet the corresponding amounts as at the end of the immediately preceding financial year; and
(b)in every profit and loss account and in all notes attached to that profit and loss account the corresponding amounts for the corresponding period of the immediately preceding financial year,
and where the respective financial years are not equal in length, the periods covered shall be clearly indicated by way of note or otherwise.
(1)  Where the accounts or consolidated accounts could be misleading by reason of a failure to explain the method used in dealing with, or calculating the amount of, any item or information included in or excluded from the accounts or consolidated accounts, there shall be stated (whether by way of note or otherwise) the method used to deal with, or calculate the amount of, the item or information.
(2)  Any sums which consist of or are in the nature of interest, accommodation charges, service charges, maintenance charges or insurance premiums, being income that has not been earned at the end of the financial year, shall not be included in the gross amount of debts owing to the company or the company and its subsidiaries unless that unearned income is shown as a deduction from that gross amount.
(3)  A short statement of the method by which the amount of unearned income has been calculated shall be included in the accounts or consolidated accounts (whether by way of note or otherwise).”.
New Eleventh Schedule
71.  The Companies Act is amended by inserting, immediately after the Tenth Schedule, the following Schedule:
ELEVENTH SCHEDULE
Section 227G(4).
Powers of judicial manager
The judicial manager may exercise all or any of the following powers, namely:
(a)power to take possession of, collect and get in the property of the company and, for that purpose, to take such proceedings as may seem to him expedient;
(b)power to sell or otherwise dispose of the property of the company by public auction or private contract;
(c)power to borrow money and grant security therefor over the property of the company;
(d)power to appoint a solicitor or accountant or other professionally qualified person to assist him in the performance of his functions;
(e)power to bring or defend any action or other legal proceedings in the name and on behalf of the company;
(f)power to refer to arbitration any question affecting the company;
(g)power to effect and maintain insurances in respect of the business and property of the company;
(h)power to use the company’s seal;
(i)power to do all acts and to execute in the name and on behalf of the company any deed, receipt or other document;
(j)power to draw, accept, make and endorse any bill of exchange or promissory note in the name and on behalf of the company;
(k)power to appoint any agent to do any business which he is unable to do himself or which can more conveniently be done by an agent and power to employ and dismiss employees;
(l)power to do all such things (including the carrying out of works) as may be necessary for the realisation of the property of the company;
(m)power to make any payment which is necessary or incidental to the performance of his functions;
(n)power to carry on the business of the company;
(o)power to establish subsidiaries of the company;
(p)power to transfer to subsidiaries of the company the whole or any part of the business and property of the company;
(q)power to grant or accept a surrender of a lease or tenancy of any of the property of the company, and to take a lease or tenancy of any property required or convenient for the business of the company;
(r)power to make any arrangement or compromise on behalf of the company;
(s)power to call up any uncalled capital of the company;
(t)power to rank and claim in the bankruptcy, insolvency, sequestration or liquidation of any person indebted to the company and to receive dividends, and to accede to trust deeds for the creditors of any such person;
(u)power to present or defend a petition for the winding up of the company;
(v)power to do all other things incidental to the exercise of the foregoing powers.”.
Miscellaneous amendments
72.  The Companies Act is amended —
(a)by deleting the words “7 days” in sections 82(2)(b), 83(2), 84(2) and 86(2)(b) and substituting in each case the words “2 days”;
(b)by deleting “$5,000” and “6 months” in section 148(1) and substituting “$10,000” and “2 years” respectively;
(c)by deleting “$2,000” and “6 months” in section 154(1) and substituting “$10,000” and “2 years” respectively;
(d)by deleting “$1,000” in sections 142(2), 143(2) and 173(7) and substituting in each case “$5,000”;
(e)by inserting, immediately after the word “offence” in section 175(4)(a), the words “and shall be liable on conviction to a fine not exceeding $5,000 and also to a default penalty”;
(f)by deleting “$2,000” in section 197(7) and substituting “$5,000”;
(g)by deleting “$500” in section 254(2)(a) and substituting “$2,000”;
(h)by deleting “$750” in section 256(3) and substituting “$3,000”;
(i)by deleting “$200” in section 274(2) and substituting “$1,000”;
(j)by deleting “$50” in section 336(1)(c)(i) and (ii) and substituting in each case “$200”; and
(k)by deleting “$500” in section 351(2)(a) and substituting “$2,000”.