Singapore Companies Act - Chapter 50 - Arrangements, Reconstructions and Amalgamations

Singapore Companies Act Singapore Companies Act Singapore Companies Act Singapore Companies Act

PART VII

ARRANGEMENTS, RECONSTRUCTIONS AND AMALGAMATIONS

Power to compromise with creditors and members

210.

—(1)  Where a compromise or arrangement is proposed between a company and its creditors or any class of them or between the company and its members or any class of them, the Court may, on the application in a summary way of the company or of any creditor or member of the company, or, in the case of a company being wound up, of the liquidator, order a meeting of the creditors or class of creditors or of the members of the company or class of members to be summoned in such manner as the Court directs.

(2)  A meeting held pursuant to an order of the Court made under subsection (1) may be adjourned from time to time if the resolution for adjournment is approved by a majority in number representing three-fourths in value of the creditors or class of creditors or members or class of members present and voting either in person or by proxy at the meeting.

(3)  If a majority in number representing three-fourths in value of the creditors or class of creditors or members or class of members present and voting either in person or by proxy at the meeting or the adjourned meeting agrees to any compromise or arrangement, the compromise or arrangement shall, if approved by order of the Court, be binding on all the creditors or class of creditors or on the members or class of members, as the case may be, and also on the company or, in the case of a company in the course of being wound up, on the liquidator and contributories of the company.

(3A)  Where the company is a banking corporation or licensed insurer, as the case may be, the Monetary Authority of Singapore established under the Monetary Authority of Singapore Act (Cap. 186) shall have the same powers and rights as a creditor of the company under the Companies Act including the right to appear and be heard before a Court in any proceedings under this section, but shall not have the right to vote at any meeting summoned under this section

[16/2011 wef 01/05/2011]

[1/2007 wef 31/03/2007]

(4)  Subject to subsection (4A), the Court may grant its approval to a compromise or arrangement subject to such alterations or conditions as it thinks just

[1/2007 wef 31/03/2007]

(4A)  The Court shall not approve any compromise or arrangement which has been proposed for the purposes of or in connection with any scheme referred to in section 212(1) under which the whole or any part of the undertaking or the property of a banking corporation incorporated in Singapore or licensed insurer incorporated in Singapore is to be transferred, unless the Minister charged with the responsibility for banking or insurance matters, as the case may be, has consented to the compromise or arrangement or has certified that his consent is not required

[16/2011 wef 01/05/2011]

[1/2007 wef 31/03/2007]

(5)  An order under subsection (3) shall have no effect until a copy of the order is lodged with the Registrar, and upon being so lodged, the order shall take effect on and from the date of lodgment or such earlier date as the Court may determine and as may be specified in the order. .

(6)  Subject to subsection (7), a copy of every order made under subsection (3) shall be annexed to every copy of the memorandum of the company issued after the order has been made, or, in the case of a company not having a memorandum, to every copy so issued of the instrument constituting or defining the constitution of the company.

(7)  The Court may, by order, exempt a company from compliance with the requirements of subsection (6) or determine the period during which the company shall so comply.

(8)  Where any such compromise or arrangement (whether or not for the purposes of or in connection with a scheme for the reconstruction of any company or companies or the amalgamation of any 2 or more companies) has been proposed, the directors of the company shall —

(a) if a meeting of the members of the company by resolution so directs, instruct such accountants or solicitors or both as are named in the resolution to report on the proposals and forward their report or reports to the directors as soon as possible; and

(b) make such report or reports available at the registered office of the company for inspection by the shareholders and creditors of the company at least 7 days before the date of any meeting ordered by the Court to be summoned as provided in subsection (1).

(9)  Every company which makes default in complying with subsection (6) or (8) and every officer of the company who is in default shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $2,000. .

Power of Court to restrain proceedings

(10)  Where no order has been made or resolution passed for the winding up of a company and any such compromise or arrangement has been proposed between the company and its creditors or any class of such creditors, the Court may, in addition to any of its powers, on the application in a summary way of the company or of any member or creditor of the company restrain further proceedings in any action or proceeding against the company except by leave of the Court and subject to such terms as the Court imposes.

(11)  In this section —

“arrangement” includes a reorganisation of the share capital of a company by the consolidation of shares of different classes or by the division of shares into shares of different classes or by both these methods;

“company” means any corporation or society liable to be wound up under this Act.

[UK, 1948, s. 206; Aust., 1961, s. 181]

Information as to compromise with creditors and members

211.

—(1)  Where a meeting is summoned under section 210, there shall —

(a) with every notice summoning the meeting which is sent to a creditor or member, be sent also a statement explaining the effect of the compromise or arrangement and in particular stating any material interests of the directors, whether as directors or as members or as creditors of the company or otherwise, and the effect thereon of the compromise or arrangement in so far as it is different from the effect on the like interests of other persons; and

(b) in every notice summoning the meeting which is given by advertisement, be included either such a statement or a notification of the place at which and the manner in which creditors or members entitled to attend the meeting may obtain copies of such a statement.

(2)  Where the compromise or arrangement affects the rights of debenture holders, the statement shall give the like explanation with respect to the trustee for the debenture holders as, under subsection (1), a statement is required to give with respect to the directors.

(3)  Where a notice given by advertisement includes a notification that copies of such a statement can be obtained, every creditor or member entitled to attend the meeting shall on making application in the manner indicated by the notice be furnished by the company free of charge with a copy of the statement.

(4)  Each director and each trustee for debenture holders shall give notice to the company of such matters relating to himself as may be necessary for the purposes of this section within 7 days of the receipt of a request in writing for information as to such matters.

(5)  Where default is made in complying with any requirement of this section, the company and every officer of the company who is in default 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. .

(6)  For the purpose of subsection (5), the liquidator of the company and any trustee for debenture holders shall be deemed to be an officer of the company.

(7)  Notwithstanding subsection (5), a person shall not be liable under that subsection if he shows that the default was due to the refusal of any other person, being a director or trustee for debenture holders, to supply the necessary particulars as to his interests

[UK, 1948, s. 207; Aust., 1961, s. 182]

Approval of compromise or arrangement by Court

212.

—(1)  Where an application is made to the Court under this Part for the approval of a compromise or arrangement and it is shown to the Court that the compromise or arrangement has been proposed for the purposes of or in connection with a scheme for the reconstruction of any company or companies or the amalgamation of any 2 or more companies, and that under the scheme the whole or any part of the undertaking or the property of any company concerned in the scheme (referred to in this section as the transferor company) is to be transferred to another company (referred to in this section as the transferee company), the Court may, subject to subsection (1A), either by the order approving the compromise or arrangement or by any subsequent order provide for all or any of the following matters:

(a) the transfer to the transferee company of the whole or any part of the undertaking and of the property or liabilities of the transferor company;

(b) the allotting or appropriation by the transferee company of any shares, debentures, policies or other like interests in that company which under the compromise or arrangement are to be allotted or appropriated by that company to or for any person;

(c) the continuation by or against the transferee company of any legal proceedings pending by or against the transferor company;

(d) the dissolution, without winding up, of the transferor company;

(e) the provision to be made for any persons who, within such time and in such manner as the Court directs, dissent from the compromise or arrangement;

(f) such incidental, consequential and supplemental matters as are necessary to secure that the reconstruction or amalgamation shall be fully and effectively carried out.

(1A)  Without prejudice to section 210(4A), the Court shall not make any order providing for the transfer of the whole or any part of the undertaking or the property of a banking corporation incorporated in Singapore or licensed insurer incorporated in Singapore unless the Minister charged with the responsibility for banking or insurance matters, as the case may be, has consented to the transfer or has certified that his consent is not required

[16/2011 wef 01/05/2011]

[1/2007 wef 31/03/2007]

(2)  Where an order made under this section provides for the transfer of property or liabilities, then by virtue of the order that property shall be transferred to and vest in, and those liabilities shall be transferred to and become the liabilities of, the transferee company, free in the case of any particular property if the order so directs, from any charge which is by virtue of the compromise or arrangement to cease to have effect.

(3)  Where an order is made under this section, every company in relation to which the order is made shall lodge within 7 days of the making of the order —

(a) a copy of the order with the Registrar; and

(b) where the order relates to land, an office copy of the order with the appropriate authority concerned with the registration or recording of dealings in that land, and every company which makes default in complying with this section and every officer of the company who is in default shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $2,000 and also to a default penalty.

[15/84; 12/2002]

(4)  No vesting order, referred to in this section, shall have any effect or operation in transferring or otherwise vesting land until the appropriate entries are made with respect to the vesting of that land by the appropriate authority.

(5)  In this section —

“liabilities” includes duties;

“property” includes property, rights and powers of every description.

(6)  Notwithstanding section 210(11), “company” in this section does not include any company other than a company as defined in section 4

[UK, 1948, s. 208; Aust., 1961, s. 183]

Take-over offers

213.  [Repealed by S 675/2001]

Variation of take-over offers

214.  [Repealed by S 675/2001]

Power to acquire shares of shareholders dissenting from scheme or contract approved by 90% majority

215.

—(1)  Where a scheme or contract involving the transfer of all of the shares or all of the shares in any particular class in a company (referred to in this section as the transferor company) to another company or corporation (referred to in this section as the transferee company) has, within 4 months after the making of the offer in that behalf by the transferee company, been approved as to the shares or as to each class of shares whose transfer is involved by the holders of not less than 90% of the total number of those shares (excluding treasury shares) or of the shares of that class (other than shares already held at the date of the offer by the transferee company, and excluding any shares in the company held as treasury shares), the transferee company may at any time within 2 months, after the offer has been so approved, give notice in the prescribed manner to any dissenting shareholder that it desires to acquire his shares; and when such a notice is given the transferee company shall, unless on an application made by the dissenting shareholder within one month from the date on which the notice was given or within 14 days of a statement being supplied to a dissenting shareholder pursuant to subsection (2) (whichever is the later) the Court thinks fit to order otherwise, be entitled and bound to acquire those shares on the terms which, under the scheme or contract the shares of the approving shareholders are to be transferred to the transferee company or if the offer contained 2 or more alternative sets of terms upon the terms which were specified in the offer as being applicable to dissenting shareholders

[15/84; 8/2003; 21/2005]

(2)  Where a transferee company has given notice to any dissenting shareholder that it desires to acquire his shares, the dissenting shareholder shall be entitled to require the company by a demand in writing served on that company, within one month from the date on which the notice was given, to supply him with a statement in writing of the names and addresses of all other dissenting shareholders as shown in the register of members, and the transferee company shall not be entitled or bound to acquire the shares of the dissenting shareholders until 14 days after the posting of the statement of such names and addresses to the dissenting shareholder.

(3)  Where, in pursuance of any such scheme or contract, shares in a company are transferred to another company or its nominee and those shares together with any other shares in the first-mentioned company held by the transferee company at the date of the transfer comprise or include 90% of the total number of the shares (excluding treasury shares) in the first-mentioned company or of any class of those shares, then —

(a) the transferee company shall within one month from the date of the transfer (unless on a previous transfer in pursuance of the scheme or contract it has already complied with this requirement) give notice of that fact in the prescribed manner to the holders of the remaining shares or of the remaining shares of that class who have not assented to the scheme or contract; and

(b) any such holder may within 3 months from the giving of the notice to him require the transferee company to acquire the shares in question, and where a shareholder gives notice under paragraph (b) with respect to any shares, the transferee company shall be entitled and bound to acquire those shares on the terms on which under the scheme or contract the shares of the approving shareholders were transferred to it, or on such other terms as are agreed or as the Court on the application of either the transferee company or the shareholder thinks fit to order.

[8/2003; 21/2005]

(4)  Where a notice has been given by the transferee company under subsection (1) and the Court has not, on an application made by the dissenting shareholder, ordered to the contrary, the transferee company shall, after the expiration of one month after the date on which the notice has been given or, after 14 days after a statement has been supplied to a dissenting shareholder pursuant to subsection (2) or if an application to the Court by the dissenting shareholder is then pending, after that application has been disposed of, transmit a copy of the notice to the transferor company together with an instrument of transfer executed, on behalf of the shareholder by any person appointed by the transferee company, and on its own behalf by the transferee company, and pay, allot or transfer to the transferor company the amount or other consideration representing the price payable by the transferee company for the shares which by virtue of this section that company is entitled to acquire, and the transferor company shall thereupon register the transferee company as the holder of those shares.

(5)  Any sums received by the transferor company under this section shall be paid into a separate bank account, and any such sums and any other consideration so received shall be held by that company in trust for the several persons entitled to the shares in respect of which they were respectively received.

(6)  Where any consideration other than cash is held in trust by a company for any person under this section, it may, after the expiration of 2 years and shall before the expiration of 10 years from the date on which such consideration was allotted or transferred to it, transfer such consideration to the Official Receiver.

(7)  The Official Receiver shall sell or dispose of any consideration so received in such manner as he thinks fit and shall deal with the proceeds of such sale or disposal as if it were moneys paid to him in pursuance of section 322.

(8)  In this section, dissenting shareholder includes a shareholder who has not assented to the scheme or contract and any shareholder who has failed or refused to transfer his shares to the transferee company in accordance with the scheme or contract.

(9)  For the purposes of this section, shares held or acquired —

(a) by a nominee on behalf of the transferee company; or

(b) by a related corporation of the transferee company or by a nominee of that related corporation, shall be treated as held or acquired by the transferee company.

(10)  The reference in subsection (1) to shares already held by the transferee company includes a reference to shares which the transferee company has contracted to acquire but that shall not be construed as including shares which are the subject of a contract binding the holder thereof to accept the offer when it is made, being a contract entered into by the holder for no consideration and under seal or for no consideration other than a promise by the transferee company to make the offer.

(11)  Where, during the period within which an offer for the transfer of shares to the transferee company can be approved, the transferee company acquires or contracts to acquire any of the shares whose transfer is involved but otherwise than by virtue of the approval of the offer, then, if —

(a) the consideration for which the shares are acquired or contracted to be acquired (referred to in this subsection as the acquisition consideration) does not at that time exceed the consideration specified in the terms of the offer; or

(b) those terms are subsequently revised so that when the revision is announced the acquisition consideration, at the time referred to in paragraph (a), no longer exceeds the consideration specified in those terms, the transferee company shall be treated for the purposes of this section as having acquired or contracted to acquire those shares by virtue of the approval of the offer.

[UK, 1948, s. 209; UK, 1985, ss. 428, 429; Aust., 1961, s. 185; HK, s. 168]

Amalgamations

215A.  Without prejudice to section 212 and any other law relating to the merger or amalgamation of companies, 2 or more companies may amalgamate and continue as one company, which may be one of the amalgamating companies or a new company, in accordance with sections 215B to 215G, where applicable

[NZ, 1993, s. 219; NZ LRC, s. 188]

Amalgamation proposal

215B.

—(1)  An amalgamation proposal shall contain the terms of an amalgamation under section 215A and, in particular —

(a) the name of the amalgamated company;

(b) the registered office of the amalgamated company;

(c) the full name and residential address of every director of the amalgamated company;

(d) the share structure of the amalgamated company, specifying —

(i) the number of shares of the amalgamated company;

(ii) the rights, privileges, limitations and conditions attached to each share of the amalgamated company; and

(iii) whether the shares are transferable or non-transferable and, if transferable, whether their transfer is subject to any condition or limitation;

(e) a copy of the memorandum of the amalgamated company;

(f) the manner in which the shares of each amalgamating company are to be converted into shares of the amalgamated company;

(g) if shares of an amalgamating company are not to be converted into shares of the amalgamated company, the consideration that the holders of those shares are to receive instead of shares of the amalgamated company;

(h) any payment to be made to any member or director of an amalgamating company, other than a payment of the kind described in paragraph (g); and

(i) details of any arrangement necessary to complete the amalgamation and to provide for the subsequent management and operation of the amalgamated company.

(2)  An amalgamation proposal may specify the date on which the amalgamation is intended to become effective.

(3)  If shares of one of the amalgamating companies are held by or on behalf of another of the amalgamating companies, the amalgamation proposal —

(a) shall provide for the cancellation of those shares without payment or the provision of other consideration when the amalgamation becomes effective; and

(b) shall not provide for the conversion of those shares into shares of the amalgamated company.

(4)  A cancellation of shares under this section shall not be deemed to be a reduction of share capital within the meaning of this Act.

(5)  For the purposes of subsection (1)(a), the name of the amalgamated company may be —

(a) the name of one of the amalgamating companies; or

(b) a new name that has been reserved under section 27(12).

[NZ, 1993, s. 220; NZ LRC, s. 189]

Manner of approving amalgamation proposal

215C.

—(1)  An amalgamation proposal shall be approved —

(a) subject to the memorandum of each amalgamating company, by the members of each amalgamating company by special resolution at a general meeting; and

(b) by any other person, where any provision in the amalgamation proposal would, if contained in any amendment to the memorandum of an amalgamating company or otherwise proposed in relation to that company, require the approval of that person.

(2)  The board of directors of each amalgamating company shall, before the general meeting referred to in subsection (1)(a) —

(a) resolve that the amalgamation is in the best interest of the amalgamating company;

(b) make a solvency statement in relation to the amalgamating company in accordance with section 215I; and

(c) make a solvency statement in relation to the amalgamated company in accordance with section 215J.

(3)  Every director who votes in favour of the resolution and the making of the statements referred to in subsection (2) shall sign a declaration stating —

(a) that, in his opinion, the conditions specified in subsection (2)(a), section 215I(1)(a) and (b) (in relation to the amalgamating company) and section 215J(1)(a) and (b) (in relation to the amalgamated company) are satisfied; and

(b) the grounds for that opinion.

(4)  The board of directors of each amalgamating company shall send to every member of the amalgamating company, not less than 21 days before the general meeting referred to in subsection (1)(a) —

(a) a copy of the amalgamation proposal;

(b) a copy of the declarations given by the directors under subsection (3);

(c) a statement of any material interests of the directors, whether in that capacity or otherwise; and

(d) such further information and explanation as may be necessary to enable a reasonable member of the amalgamating company to understand the nature and implications, for the amalgamating company and its members, of the proposed amalgamation.

(5)  The directors of each amalgamating company shall, not less than 21 days before the general meeting referred to in subsection (1)(a) —

(a) send a copy of the amalgamation proposal to every secured creditor of the amalgamating company; and

(b) cause to be published in at least one daily English newspaper circulating generally in Singapore a notice of the proposed amalgamation, including a statement that —

(i) copies of the amalgamation proposal are available for inspection by any member or creditor of an amalgamating company at the registered offices of the amalgamating companies and at such other place as may be specified in the notice during ordinary business hours; and

(ii) a member or creditor of an amalgamating company is entitled to be supplied free of charge with a copy of the amalgamation proposal upon request to an amalgamating company

(6)  Any director who contravenes subsection (3) shall be guilty of an offence

[NZ, 1993, s. 221; NZ LRC, s. 190]

Short form amalgamation

215D.

—(1)  A company (referred to in this subsection as the amalgamating holding company) and one or more of its wholly-owned subsidiaries (referred to in this subsection as the amalgamating subsidiary company) may amalgamate and continue as one company, being the amalgamated holding company, without complying with sections 215B and 215C if the members of each amalgamating company, by special resolution at a general meeting, resolve to approve an amalgamation of the amalgamating companies on the terms that —

(a) the shares of each amalgamating subsidiary company will be cancelled without any payment or any other consideration;

(b) the memorandum of the amalgamated company will be the same as the memorandum of the amalgamating holding company;

(c) the directors of the amalgamating holding company and every amalgamating subsidiary company are satisfied that the amalgamated company will be able to pay its debts as they fall due during the period of 12 months immediately after the date on which the amalgamation is to become effective; and

(d) the person or persons named in the resolution will be the director or directors, respectively, of the amalgamated company.

(2)  Two or more wholly-owned subsidiary companies of the same corporation may amalgamate and continue as one company without complying with sections 215B and 215C if the members of each amalgamating company, by special resolution at a general meeting, resolve to approve an amalgamation of the amalgamating companies on the terms that —

(a) the shares of all but one of the amalgamating companies will be cancelled without payment or other consideration;

(b) the memorandum of the amalgamated company will be the same as the memorandum of the amalgamating company whose shares are not cancelled;

(c) the directors of every amalgamating company are satisfied that the amalgamated company will be able to pay its debts as they fall due during the period of 12 months immediately after the date on which the amalgamation is to become effective; and

(d) the person or persons named in the resolution will be the director or directors, respectively, of the amalgamated company.

(3)  The directors of each amalgamating company shall, not less than 21 days before the general meeting referred to in subsection (1) or (2), as the case may be, give written notice of the proposed amalgamation to every secured creditor of the amalgamating company.

(4)  The resolution referred to in subsection (1) or (2), as the case may be, shall be deemed to be an amalgamation proposal that has been approved.

(5)  The board of directors of each amalgamating company shall, before the date of the general meeting referred to in subsection (1) or (2), as the case may be, make a solvency statement in relation to the amalgamated company in accordance with section 215J.

(6)  Every director who votes in favour of the making of the solvency statement referred to in subsection (5) shall sign a declaration stating —

(a) that, in his opinion, the conditions specified in section 215J(1)(a) and (b) are satisfied; and

(b) the grounds for that opinion.

(7)  Any director who contravenes subsection (6) shall be guilty of an offence.

(8)  A cancellation of shares under this section shall not be deemed to be a reduction of share capital within the meaning of this Act

[NZ, 1993, s. 222; NZ LRC, s. 191]

Registration of amalgamation

215E.

—(1)  For the purpose of effecting an amalgamation, the following documents shall be filed with the Registrar, in the prescribed form with such particulars as may be required in the form, together with payment of the prescribed fee:

(a) the amalgamation proposal that has been approved;

(b) any declaration required under section 215C or 215D, as the case may be;

(c) a declaration signed by the directors of each amalgamating company stating that the amalgamation has been approved in accordance with this Act and the memorandum of the amalgamating company;

(d) where the amalgamated company is a new company or the amalgamation proposal provides for a change of the name of the amalgamated company, a copy of any notice or other documentary evidence that the name which it is proposed to be registered or the proposed new name, as the case may be, has been reserved under section 27(12); and

(e) a declaration signed by the directors, or proposed directors, of the amalgamated company stating that, where the proportion of the claims of the creditors of the amalgamated company in relation to the value of the assets of the amalgamated company is greater than the proportion of the claims of the creditors of an amalgamating company in relation to the value of the assets of the amalgamating company, no creditor will be prejudiced by that fact.

(2)  Where the amalgamated company is a new company —

(a) section 19(1)(a) and (c) shall be deemed to have been complied with if, and only if, subsection (1) has been complied with; and

(b) the reference to a person named in the articles as a director or the secretary of the proposed company in section 19(2)(b) includes a reference to a proposed director of the amalgamated company.

[NZ, 1993, s. 223; NZ LRC, s. 192]

Notice of amalgamation, etc.

215F.

—(1)  Upon the receipt of the relevant documents and fees, the Registrar shall —

(a) if the amalgamated company is the same as one of the amalgamating companies, issue a notice of amalgamation in such form as the Registrar may determine; or

(b) if the amalgamated company is a new company, issue a notice of amalgamation in such form as the Registrar may determine together with the notice of incorporation under section 19(4).

(2)  Where an amalgamation proposal specifies a date on which the amalgamation is intended to become effective, and that date is the same as or later than the date on which the Registrar receives the relevant documents and fees referred to in subsection (1), the notice of amalgamation and any notice of incorporation issued by the Registrar shall be expressed to have effect on the date specified in the amalgamation proposal.

(3)  The Registrar shall, as soon as practicable after the effective date of an amalgamation, remove the amalgamating companies, other than the amalgamated company, from the register.

(4)  Upon the application of the amalgamated company and payment of the prescribed fee, the Registrar shall issue to the amalgamated company a certificate of confirmation of amalgamation under his hand and seal

[NZ, 1993, s. 224; NZ LRC, s. 193]

Effect of amalgamations

215G.  On the date shown in a notice of amalgamation —

(a) the amalgamation shall be effective;

(b) the amalgamated company shall have the name specified in the amalgamation proposal;

(c) all the property, rights and privileges of each of the amalgamating companies shall be transferred to and vest in the amalgamated company;

(d) all the liabilities and obligations of each of the amalgamating companies shall be transferred to and become the liabilities and obligations of the amalgamated company;

(e) all proceedings pending by or against any amalgamating company may be continued by or against the amalgamated company;

(f) any conviction, ruling, order or judgment in favour of or against an amalgamating company may be enforced by or against the amalgamated company; and

(g) the shares and rights of the members in the amalgamating companies shall be converted into the shares and rights provided for in the amalgamation proposal.

[NZ, 1993, s. 225; NZ LRC, s. 194]

Power of Court in certain cases

215H.

—(1)  If the Court is satisfied that giving effect to an amalgamation proposal would unfairly prejudice a member or creditor of an amalgamating company or a person to whom an amalgamating company is under an obligation, it may, on the application of that person made at any time before the date on which the amalgamation becomes effective, make any order it thinks fit in relation to the amalgamation proposal, and may, without limiting the generality of this subsection, make an order —

(a) directing that effect must not be given to the amalgamation proposal;

(b) modifying the amalgamation proposal in such manner as may be specified in the order; or

(c) directing the amalgamating company or its board of directors to reconsider the amalgamation proposal or any part thereof.

(2)  An order may be made under subsection (1) on such terms or conditions as the Court thinks fit

[NZ, 1993, s. 226; NZ LRC, s. 194A]

Solvency statement in relation to amalgamating company and offence for making false statement

215I.

—(1)  For the purposes of section 215C(2)(b), “solvency statement”, in relation to an amalgamating company, means a statement by the board of directors of the amalgamating company that it has formed the opinion —

(a) that, as regards the amalgamating company’s situation at the date of the statement, there is no ground on which the amalgamating company could then be found to be unable to pay its debts; and

(b) that, at the date of the statement, the value of the amalgamating company’s assets is not less than the value of its liabilities (including contingent liabilities), being a statement which complies with subsection (2).

(2)  The solvency statement —

(a) if the amalgamating company is exempt from audit requirements under section 205B or 205C, shall be in the form of a statutory declaration; or

(b) if the amalgamating company is not such a company, shall be in the form of a statutory declaration or shall be accompanied by a report from its auditor that he has inquired into the affairs of the amalgamating company and is of the opinion that the statement is not unreasonable given all the circumstances.

(3)  In forming an opinion for the purposes of subsection (1)(a) and (b), the directors shall take into account all liabilities of the amalgamating company (including contingent liabilities).

(4)  In determining, for the purposes of subsection (1)(b), whether the value of the amalgamating company’s assets is or will become less than the value of its liabilities (including contingent liabilities), the board of directors of the amalgamating company —

(a) shall have regard to —

(i) the most recent financial statements of the amalgamating company that comply with section 201(1A), (3) and (3A), as the case may be; and

(ii) all other circumstances that the directors know or ought to know affect, or may affect, the value of the amalgamating company’s assets and the value of the amalgamating company’s liabilities (including contingent liabilities); and

(b) may rely on valuations of assets or estimates of liabilities that are reasonable in the circumstances.

(5)  In determining, for the purposes of subsection (4), the value of a contingent liability, the board of directors of the amalgamating company may take into account —

(a) the likelihood of the contingency occurring; and

(b) any claim the amalgamating company is entitled to make and can reasonably expect to be met to reduce or extinguish the contingent liability.

(6)  Any director of an amalgamating company who votes in favour of or otherwise causes a solvency statement under this section to be made without having reasonable grounds for the opinions expressed in it shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $100,000 or to imprisonment for a term not exceeding 3 years or to both

[Companies, s. 76F (4) to (6)]

Solvency statement in relation to amalgamated company and offence for making false statement

215J.

—(1)  For the purposes of sections 215C(2)(c) and 215D(5), “solvency statement”, in relation to an amalgamated company, means a statutory declaration by the board of directors of each amalgamating company that it has formed the opinion —

(a) that the amalgamated company will be able to pay its debts as they fall due during the period of 12 months immediately after the date on which the amalgamation is to become effective; and

(b) that the value of the amalgamated company’s assets will not be less than the value of its liabilities (including contingent liabilities).

(2)  In forming an opinion for the purposes of subsection (1)(a) and (b), the directors shall take into account all liabilities of the amalgamated company (including contingent liabilities).

(3)  In determining, for the purposes of subsection (1)(b), whether the value of the amalgamated company’s assets will become less than the value of its liabilities (including contingent liabilities), the board of directors of each amalgamating company —

(a) shall have regard to —

(i) the most recent financial statements of the amalgamating company and the other amalgamating companies that comply with section 201(1A), (3) and (3A), as the case may be; and

(ii) all other circumstances that the directors know or ought to know affect, or may affect, the value of the amalgamated company’s assets and the value of the amalgamated company’s liabilities (including contingent liabilities); and

(b) may rely on valuations of assets or estimates of liabilities that are reasonable in the circumstances.

(4)  In determining, for the purposes of subsection (3), the value of a contingent liability, the board of directors of each amalgamating company may take into account —

(a) the likelihood of the contingency occurring; and

(b) any claim the amalgamated company is entitled to make and can reasonably expect to be met to reduce or extinguish the contingent liability.

(5)  Any director of an amalgamating company who votes in favour of or otherwise causes a solvency statement under this section to be made without having reasonable grounds for the opinions expressed in it shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $100,000 or to imprisonment for a term not exceeding 3 years or to both.

Personal remedies in cases of oppression or injustice

216.

—(1)  Any member or holder of a debenture of a company or, in the case of a declared company under Part IX, the Minister may apply to the Court for an order under this section on the ground —

(a) that the affairs of the company are being conducted or the powers of the directors are being exercised in a manner oppressive to one or more of the members or holders of debentures including himself or in disregard of his or their interests as members, shareholders or holders of debentures of the company; or

(b) that some act of the company has been done or is threatened or that some resolution of the members, holders of debentures or any class of them has been passed or is proposed which unfairly discriminates against or is otherwise prejudicial to one or more of the members or holders of debentures (including himself)

[13/87; 22/93]

(2)  If on such application the Court is of the opinion that either of such grounds is established the Court may, with a view to bringing to an end or remedying the matters complained of, make such order as it thinks fit and, without prejudice to the generality of the foregoing, the order may —

(a) direct or prohibit any act or cancel or vary any transaction or resolution;

(b) regulate the conduct of the affairs of the company in future;

(c) authorise civil proceedings to be brought in the name of or on behalf of the company by such person or persons and on such terms as the Court may direct;

(d) provide for the purchase of the shares or debentures of the company by other members or holders of debentures of the company or by the company itself;

(e) in the case of a purchase of shares by the company provide for a reduction accordingly of the company’s capital; or

(f) provide that the company be wound up.

(3)  Where an order that the company be wound up is made pursuant to subsection (2)(f), the provisions of this Act relating to winding up of a company shall, with such adaptations as are necessary, apply as if the order had been made upon an application duly made to the Court by the company.

(4)  Where an order under this section makes any alteration in or addition to any company’s memorandum or articles, then, notwithstanding anything in any other provision of this Act, but subject to the provisions of the order, the company concerned shall not have power, without the leave of the Court, to make any further alteration in or addition to the memorandum or articles inconsistent with the provisions of the order; but subject to the foregoing provisions of this subsection the alterations or additions made by the order shall be of the same effect as if duly made by resolution of the company.

(5)  A copy of any order made under this section shall be lodged by the applicant with the Registrar within 14 days after the making of the order.

(6)  Any person who fails to comply with subsection (5) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $1,000 and also to a default penalty.

(7)  This section shall apply to a person who is not a member of a company but to whom shares in the company have been transmitted by operation of law as it applies to members of a company; and references to a member or members shall be construed accordingly

[15/84; 13/87]

[UK, 1948, s. 210; Aust., 1961, s. 186]

Derivative or representative actions

216A.

—(1)  In this section and section 216B —

“company” means a company other than a company that is listed on the securities exchange in Singapore;

“complainant” means —

(a) any member of a company;

(b) the Minister, in the case of a declared company under Part IX; or

(c) any other person who, in the discretion of the Court, is a proper person to make an application under this section

[22/93; 42/2001]

(2)  Subject to subsection (3), a complainant may apply to the Court for leave to bring an action in the name and on behalf of the company or intervene in an action to which the company is a party for the purpose of prosecuting, defending or discontinuing the action on behalf of the company.

(3)  No action may be brought and no intervention in an action may be made under subsection (2) unless the Court is satisfied that —

(a) the complainant has given 14 days’ notice to the directors of the company of his intention to apply to the Court under subsection (2) if the directors of the company do not bring, diligently prosecute or defend or discontinue the action;

(b) the complainant is acting in good faith; and

(c) it appears to be prima facie in the interests of the company that the action be brought, prosecuted, defended or discontinued.

(4)  Where a complainant on an application can establish to the satisfaction of the Court that it is not expedient to give notice as required in subsection (3)(a), the Court may make such interim order as it thinks fit pending the complainant giving notice as required.

(5)  In granting leave under this section, the Court may make such orders or interim orders as it thinks fit in the interests of justice, including (but not limited to) the following:

(a) an order authorising the complainant or any other person to control the conduct of the action;

(b) an order giving directions for the conduct of the action; and

(c) an order requiring the company to pay reasonable legal fees and disbursements incurred by the complainant in connection with the action.

(6)  Where the action has been commenced or is to be brought in the subordinate courts, an application for leave under subsection (2) shall be made in a District Court

[Canada, 1985, ss. 238-240]

Evidence of shareholders’ approval not decisive — Court approval to discontinue action under section 216A

216B.

—(1)  An application made or an action brought or intervened in under section 216A shall not be stayed or dismissed by reason only that it is shown that an alleged breach of a right or duty owed to the company has been or may be approved by the members of the company, but evidence of approval by the members may be taken into account by the Court in making an order under section 216A.

(2)  An application made or an action brought or intervened in under section 216A shall not be stayed, discontinued, settled or dismissed for want of prosecution without the approval of the Court given upon such terms as the Court thinks fit and, if the Court determines that the interest of any complainant may be substantially affected by such stay, discontinuance, settlement or dismissal, the Court may order any party to the application or action to give notice to the complainant.

(3)  In an application made or an action brought or intervened in under section 216A, the Court may at any time order the company to pay to the complainant interim costs, including legal fees and disbursements, but the complainant may be accountable for such interim costs upon final disposition of the application or action

[Canada, 1985, s. 242]

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