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Control of takeovers of finance companies incorporated in Singapore

Finance Companies Act 1967

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—(1) This section and sections 11 and 12 apply to and in relation to all natural persons whether resident in Singapore or not and whether citizens of Singapore or not, and to all bodies corporate or unincorporate, whether incorporated or carrying on business in Singapore or not.(2) Without affecting section 9, a person must not enter into an agreement to acquire shares of a finance company that is incorporated in Singapore by virtue of which the person would, if the agreement is carried out, obtain effective control of that finance company without first notifying the Authority of the person’s intention to enter into the agreement and obtaining the approval of the Authority to the person entering into the agreement.(3) For the purposes of this section —(a)a person is to be regarded as entering into an agreement by virtue of which the person would obtain effective control of a finance company if the person alone or acting together with any associate or associates of that person would be in a position to control at least 20% of the voting power in the finance company or would hold interests in at least 20% of the issued shares of the finance company;(b)a reference to an agreement by which a person would obtain effective control of a finance company that is incorporated in Singapore includes a reference to an agreement by which the person would acquire any interest in shares in the finance company where, upon the acquisition of those interests and of any other interests in other shares of the finance company that the person has offered to acquire, the person would have effective control of the finance company;(c)a reference to a person offering to acquire interests in shares includes —(i)a reference to a person making or publishing a statement, however expressed, that expressly or impliedly invites a holder of interests in shares to offer to dispose of interests in shares; and(ii)a reference to a person taking part in or proposing to take part in negotiations with a view to the acquisition of shares;(d)a person holds an interest in a share if the person has any legal or equitable interest in that share and, without limiting the generality of the foregoing, an interest in shares has the meaning given to that expression in section 7(6) to (10) of the Companies Act 1967;(e)a reference to the voting power in a finance company is a reference to the total number of votes that might be cast in the general meeting of the finance company;(f)the following persons are associates of a person:(i)the person’s spouse or a parent or remoter lineal ancestor, son, daughter or remoter issue, brother or sister of the person;(ii)any partner of the person;(iii)any corporation of which the person is an officer;(iv)where the person is a corporation, any officer of the corporation;(v)any employee or employer of the person;(vi)any officer of any corporation of which the person is an officer;(vii)any employee of a natural person of whom the person is an employee;(viii)any corporation whose directors are accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the person or, where the person is a corporation, of the directors of the person;(ix)any corporation in accordance with the directions, instructions or wishes of which, or of the directors of which, the person is accustomed or under an obligation, whether formal or informal, to act;(x)any corporation in which the person who is in a position to control at least 20% of the voting power in the corporation; and(xi)where the person is a corporation, a person who is in a position to control at least 20% of the voting power in the corporation.(4) Any person who contravenes subsection (2) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $50,000 or to imprisonment for a term not exceeding 3 years or to both.

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