Singapore legislation
Clause 31
Clause 31
Investments in companies
(1)
No designated financial holding company shall acquire or hold, directly or indirectly, a major stake in any company without the prior approval of the Authority.
(2)
Notwithstanding subsection (1) —
a designated financial holding company may, within 6 months after its designation date or such longer period as the Authority may allow in any particular case, hold directly or indirectly, a major stake in any company without the prior approval of the Authority; but(b)the designated financial holding company shall not continue to hold the major stake after the period referred to in paragraph (a) unless it has obtained the approval of the Authority.
(3)
Subject to subsection (4), the approval of the Authority for a designated financial holding company to acquire or hold, directly or indirectly, a major stake in a company shall be deemed to have been granted in the following circumstances:
the major stake is acquired or held indirectly through a subsidiary of the designated financial holding company —
that is a bank incorporated in Singapore which acquisition or holding of the major stake was approved by the Authority under section 32 of the Banking Act (Cap. 19) prior to the financial holding company being designated under section 4, and which approval has not been revoked; or
that is a licensed insurer which acquisition or holding of the major stake was approved, or deemed to have been approved, by the Authority under section 30B of the Insurance Act (Cap. 142) prior to the financial holding company being designated under section 4, and which approval has not been revoked; or
the Authority had, prior to the financial holding company being designated under section 4, given the financial holding company approval to acquire or hold the major stake pursuant to the requirements of directions made under section 28(3) of the Monetary Authority of Singapore Act (Cap. 186), and which approval has not been revoked.
(4)
Any approval granted, or deemed to have been granted, by the Authority under this section to a designated financial holding company to acquire or hold, directly or indirectly, a major stake in a company may be subject to such conditions as the Authority may determine, including any condition relating to the operations or activities of the company.
(5)
For the avoidance of doubt, the conditions imposed by the Authority under subsection (4) may be specified by notice in writing to a designated financial holding company or any class of designated financial holding companies.
(6)
The Authority may at any time add to, vary or revoke any condition imposed under subsection (4).
(7)
This section shall not apply to —
any interest held by way of security for the purposes of a transaction entered into in the ordinary course of the business of the designated financial holding company;
any shareholding or interest acquired or held by a designated financial holding company in the course of satisfaction of debts due to it which is disposed of at the earliest suitable opportunity; and
such other interest as may be prescribed.
(8)
The Authority may, by regulations —
exclude the operation of this section in respect of any company or class of companies, subject to such conditions as may be prescribed;
provide for the manner of computation of major stakes; and
provide that any interest or control referred to in the definition of “major stake” in subsection (10), that is acquired or held, directly or indirectly, by a company in which a designated financial holding company has, directly or indirectly, a major stake shall be deemed to be acquired or held by the designated financial holding company.
(9)
Any designated financial holding company which contravenes this section or fails to comply with any condition imposed or prescribed under this section shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $250,000 and, in the case of a continuing offence, to a further fine not exceeding $25,000 for every day or part thereof during which the offence continues after conviction.
(10)
In this section, “major stake” means —
any beneficial interest in issued shares of a company exceeding 10% of the total number of issued shares in the company;
control over more than 10% of the voting power in a company; or
any interest in a company, where the directors of the company are accustomed or under an obligation, whether formal or informal, to act in accordance with the designated financial holding company’s directions, instructions or wishes, or where the designated financial holding company is in a position to determine the policy of the company.