Singapore legislation
Section 81I
Section 81I
Right of relevant office holder to recover certain amounts arising from certain transactions
(1)
Where a participant (called in this section the first participant) sells securities, securities‑based derivatives contracts or units in a collective investment scheme at an over‑value to, or purchases securities, securities‑based derivatives contracts or units in a collective investment scheme at an under‑value from, another participant (called in this section the second participant) in the circumstances referred to in subsection (3), and thereafter a relevant office holder acts for —
the second participant;
the principal of the second participant in the sale or purchase; or
the estate of the second participant or person referred to in paragraph (b),then, unless a court otherwise orders, the relevant office holder may recover from the first participant, or the principal of the first participant, an amount equal to the specified gain obtained under the sale or purchase by the first participant, or the principal of the first participant.
(2)
The amount equal to the specified gain is recoverable even if the sale or purchase may have been discharged according to the business rules of an approved clearing house, or a recognised clearing house, and replaced by a market contract.
(3)
The circumstances referred to in subsection (1) are that —
a specified event has occurred in relation to the second participant, or the principal of the second participant, within the period of 6 months immediately following the date on which the sale or purchase was entered into; and
at the time the sale or purchase was entered into, the first participant, or the principal of the first participant, knew, or ought reasonably to have known, that a specified event was likely to occur in relation to the second participant, or the principal of the second participant.
(4)
In this section —
Definition
“specified event”, in relation to the second participant or a person who is or was, in respect of a sale or purchase referred to in subsection (1), the principal of the second participant, means —
the making of a bankruptcy order against the second participant or that person, as the case may be;
the making of a statutory declaration in respect of the second participant or that person (as the case may be) under section 161(1) of the Insolvency, Restructuring and Dissolution Act 2018;
the summoning of a meeting of creditors in relation to the second participant or that person (as the case may be) under section 166 of the Insolvency, Restructuring and Dissolution Act 2018;
the making of an application for the winding up of the second participant or that person (as the case may be) before a court; or
the appointment of a judicial manager under Part 7 of the Insolvency, Restructuring and Dissolution Act 2018 in respect of the second participant or that person, as the case may be;
Definition
“specified gain”, in relation to a sale or purchase referred to in subsection (1), means the difference, as at the time the sale or purchase was entered into, between —
the market value of the securities, securities‑based derivatives contracts or units in a collective investment scheme which are the subject of the sale or purchase; and
the value of the consideration for the sale or purchase.