§ 215J — Solvency statement in relation to amalgamated company and offence for making false statement

215J.—(1) In sections 215C(2)(c) and 215D(5), “solvency statement”, in relation to an amalgamated company, means a written 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 as at 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).[36/2014]

(2) In forming an opinion for the purposes of subsection (1)(a) and (b), the directors must 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)

must have regard to —(i)

the most recent financial statements of the amalgamating company and the other amalgamating companies that comply with section 201(2) and (5), 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.[36/2014]

(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.

—(1) In sections 215C(2)(c) and 215D(5), “solvency statement”, in relation to an amalgamated company, means a written 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 as at 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).[36/2014]

(2) In forming an opinion for the purposes of subsection (1)(a) and (b), the directors must 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)

must have regard to —(i)

the most recent financial statements of the amalgamating company and the other amalgamating companies that comply with section 201(2) and (5), 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.[36/2014]

(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.