Clause 34

A member of the committee of management of a society shall at all times act honestly and use reasonable diligence in the discharge of the duties of his office.(2) Subject to subsection (3), a member of the committee of management of a society may, when exercising powers or performing duties as such a member, rely on reports, statements, financial data and other information prepared or supplied, and on professional or expert advice given, by any of the following persons:

an employee of the society whom the member believes on reasonable grounds to be reliable and competent in relation to the matters concerned;

a professional adviser or an expert in relation to matters which the member believes on reasonable grounds to be within the person’s professional or expert competence; or

any other member, or any committee of such members on which the member concerned did not serve, in relation to matters within that other member’s or committee’s designated authority.(3) Subsection (2) shall apply to a member of the committee of management of a society if, and only if, the member —

acts in good faith;

makes proper inquiry where the need for inquiry is indicated by the circumstances; and

has no knowledge that such reliance is unwarranted.(4) An officer or agent of a society shall not make improper use of any information acquired by virtue of his position as an officer or agent of the society to gain, directly or indirectly, an advantage for himself or for any other person or to cause detriment to the society.(5) Any member of the committee of management of a society who contravenes subsection (1), or any officer or agent of a society who contravenes subsection (4), shall be —

liable to the society for any profit made by him or for any damage suffered by the society as a result of such contravention; and

guilty of an offence and liable on conviction to a fine not exceeding $5,000 or to imprisonment for a term not exceeding 12 months or to both.(6) Where the committee of management of a society has appointed a person as a manager to administer and manage the affairs of the society, the appointment shall not absolve the committee of management from its responsibility for the proper direction of the affairs of the society.(7) In this section, unless the context otherwise requires —“agent”, in relation to a society, includes a banker, a solicitor or an auditor of the society and any person who at any time has been a banker, a solicitor or an auditor of the society;“officer”, in relation to a society, includes a person who at any time has been an officer of the society.(8) This section shall be in addition to and not in derogation of any other written law or rule of law relating to the duty or liability of officers of a society.Disclosure of interests in transactions, property, offices, etc.64.—

Subject to this section, every member of the committee of management of a society who is in any way, whether directly or indirectly, interested in a transaction or proposed transaction with the society shall as soon as practicable after the relevant facts have come to his knowledge declare the nature of his interest at a meeting of the committee of management of the society.(2) The requirements of subsection (1) shall not apply —

in any case where the interest of the member of the committee of management of the society consists only of being a member or creditor of a corporation which is interested in a transaction or proposed transaction with the society if the interest of the member of the committee of management may properly be regarded as not being a material interest; or

in such other cases as the Minister may prescribe.(3) For the purposes of subsection (1), a general notice given to the members of the committee of management of a society by a member of the committee of management to the effect that he is an officer of a specified corporation or a member of a specified firm or a partner or an officer of a specified limited liability partnership and is to be regarded as interested in any transaction which may, after the date of the notice, be made with that corporation, firm or limited liability partnership shall be deemed to be a sufficient declaration of interest in relation to any transaction so made if —

it specifies the nature and extent of his interest in the specified corporation, firm or limited liability partnership;

his interest is not different in nature or greater in extent than the nature and extent so specified in the general notice at the time any transaction is so made; and

it is given at a meeting of the committee of management or the member of the committee of management takes reasonable steps to ensure that it is brought up and read at the next meeting of the committee of management after it is given.(4) Every member of the committee of management of a society who holds any office or possesses any property whereby, whether directly or indirectly, duties or interests might be created in conflict with his duties or interests as member of the committee of management shall declare at a meeting of the committee of management of the society the fact and the nature, character and extent of the conflict.(5) The declaration referred to in subsection (4) shall be made at the first meeting of the committee of management held —

after he becomes a member of the committee of management; or

if he is already a member of the committee of management, then after he commenced to hold the office or to possess the property referred to in that subsection,as the case requires.(6) The secretary of the society shall record every declaration under this section in the minutes of the meeting at which it was made.(7) For the purposes of this section, an interest of a member of the family of a member of the committee of management of a society shall be treated as an interest of the member of the committee of management and the words “member of the family of a member of the committee of management of a society” shall include his spouse, son, adopted son, step-son, daughter, adopted daughter and step-daughter.(8) This section shall be in addition to and not in derogation of the operation of any rule of law or any provision in the by-laws restricting a member of the committee of management of a society from having any interest in transactions with the society or from holding offices or possessing properties involving duties or interests in conflict with his duties or interests as a member of the committee of management of the society.(9) In this section, unless the context otherwise requires —“corporation” means any body corporate incorporated, formed or existing in Singapore or outside Singapore and includes any foreign company within the meaning of section 4(1) of the Companies Act (Cap. 50);“officer” —

in relation to a corporation, has the same meaning as in section 4(1) of the Companies Act; and

in relation to a limited liability partnership, has the same meaning as in section 2(1) of the Limited Liability Partnerships Act (Cap. 163A).(10) Any member of the committee of management of a society who contravenes any provision of this section 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 12 months or to both.Restrictions relating to honoraria, etc., of members of committee of management and employees65.—

Subject to subsection (2), a member of the committee of management of a society, not being an employee of the society, may receive an honorarium or allowance (but not both) and other benefits from the society if, and only if, the payment of such honorarium or allowance and the provision of any such benefits have been authorised by a resolution to that effect passed by a general meeting of the society.(2) An employee of a society shall not decide his own remuneration.Suspension of officers65A.—

Notwithstanding any other written law, if any proceedings are instituted against a member of the committee of management, or a key employee, of a credit society in respect of any offence involving fraud or dishonesty, the committee of management shall suspend the member or key employee from being a member of the committee of management or key employee of the credit society, respectively.(2) Notwithstanding any other written law, if any proceedings are instituted against a member of the committee of management of a non-credit society in respect of any offence involving fraud or dishonesty, the Registrar may issue a written direction to require the society to suspend the member from being a member of the committee of management within such period, and on such terms and conditions, as may be specified in the written direction.(3) A non-credit society that is, or a member of the committee of management of a non-credit society who is, aggrieved by the written direction issued by the Registrar under subsection (2) requiring the non-credit society to suspend the member may, within 30 days of the issue of the written direction, appeal to the Minister whose decision shall be final.(4) Every member of the committee of management of a credit society which has contravened subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $5,000 and, in the case of a continuing offence, to a further fine not exceeding $500 for every day or part thereof during which the offence continues after conviction.(5) No criminal or civil liability shall be incurred by a society or its committee of management, or any person acting on behalf of the society or the committee of management of the society, in respect of anything done or omitted to be done with reasonable care and in good faith in the discharge or purported discharge of the obligations of the society or the committee of management of the society under this section.”.