Singapore legislation
Section 81ZE
Section 81ZE
Control of substantial shareholding in approved holding companies
(1)
A person must not enter into any agreement to acquire shares in an approved holding company by virtue of which the person would, if the agreement had been carried out, become a substantial shareholder of the approved holding company without first obtaining the approval of the Authority to enter into the agreement.
(2)
A person must not become —
a 12% controller; or
a 20% controller,of an approved holding company without first obtaining the approval of the Authority.
(3)
In subsection (2) —
Definition
“12% controller” means a person, not being a 20% controller, who alone or together with the person’s associates —
holds not less than 12% of the shares in the approved holding company; or
is in a position to control not less than 12% of the votes in the approved holding company;
Definition
“20% controller” means a person who, alone or together with the person’s associates —
holds not less than 20% of the shares in the approved holding company; or
is in a position to control not less than 20% of the votes in the approved holding company.
(4)
In this section —
a person holds a share if —
the person is deemed to have an interest in that share under section 7(6) to (10) of the Companies Act 1967; or
the person otherwise has a legal or an equitable interest in that share, except such interest as is to be disregarded under section 7(6) to (10) of the Companies Act 1967;
a reference to the control of a percentage of the votes in an approved holding company is to be construed as a reference to the control, whether direct or indirect, of that percentage of the total number of votes that might be cast in a general meeting of the approved holding company; and
a person, A, is an associate of another person, B, if —
A is the spouse, a parent, remoter lineal ancestor or step‑parent, a son, daughter, remoter issue, stepson or stepdaughter or a brother or sister of B;
A is a body corporate that is, or a majority of the directors of which are, accustomed or under an obligation whether formal or informal to act in accordance with the directions, instructions or wishes of B;
[Deleted by Act 35 of 2014](iv)A is a person who is accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of B;
A is a subsidiary of B;
[Deleted by Act 35 of 2014](vii)A is a body corporate in which B, alone or together with other associates of B as described in sub‑paragraphs (ii), (iv) and (v), is in a position to control not less than 20% of the votes in A; or
[Deleted by Act 35 of 2014](ix)A is a person with whom B has an agreement or arrangement, whether oral or in writing and whether express or implied, to act together with respect to the acquisition, holding or disposal of shares or other interests in, or with respect to the exercise of their votes in relation to, the approved holding company.
(5)
The Authority may grant its approval referred to in subsection (1) or (2) subject to such conditions or restrictions as the Authority thinks fit.
(6)
Without affecting subsection (11), the Authority may, for the purposes of securing compliance with subsection (1) or (2) or any condition or restriction imposed under subsection (5), by written notice, direct the transfer or disposal of all or any of the shares of an approved holding company in which a substantial shareholder, 12% controller or 20% controller of the approved holding company has an interest.
(7)
Until a person to whom a direction has been issued under subsection (6) transfers or disposes of the shares which are the subject of the direction, and despite anything to the contrary in the Companies Act 1967 or the memorandum or articles of association or other constituent document or documents of the approved holding company —
no voting rights are exercisable in respect of the shares which are the subject of the direction;
the approved holding company must not offer or issue any shares (whether by way of rights, bonus, share dividend or otherwise) in respect of the shares which are the subject of the direction; and
except in a liquidation of the approved holding company, the approved holding company must not make any payment (whether by way of cash dividend, dividend in kind or otherwise) in respect of the shares which are the subject of the direction.
(8)
Any issue of shares by an approved holding company in contravention of subsection (7)(b) is deemed to be void, and a person to whom a direction has been issued under subsection (6) must immediately return those shares to the approved holding company, upon which the approved holding company must return to the person any payment received from the person in respect of those shares.
(9)
Any payment made by an approved holding company in contravention of subsection (7)(c) is deemed to be void, and a person to whom a direction has been issued under subsection (6) must immediately return the payment the person has received to the approved holding company.
(10)
The Authority may exempt —
any person or class or persons; or
any class or description of shares or interests in shares,from the requirement under subsection (1) or (2), subject to such conditions or restrictions as the Authority may impose.
(11)
Any person who contravenes subsection (1) or (2), or any condition or restriction imposed by the Authority under subsection (5), shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $200,000 and, in the case of a continuing offence, to a further fine not exceeding $20,000 for every day or part of a day during which the offence continues after conviction.
(12)
Any person who contravenes subsection (7)(b) or (c), (8) or (9) or any direction issued by the Authority under subsection (6) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $150,000 and, in the case of a continuing offence, to a further fine not exceeding $15,000 for every day or part of a day during which the offence continues after conviction.