Inspection and investigation of finance companies and production of books, etc.
33.—(1) The Authority may, from time to time, inspect or cause to be inspected under conditions of secrecy, the books, accounts and transactions of any finance company and of any branch, agency or office outside Singapore opened by a finance company incorporated in Singapore.
(2) The Authority may at any time make an investigation, under conditions of secrecy, of the books, accounts and transactions of a finance company, if the Authority has reason to believe that the finance company —(a)
is carrying on its business in a manner detrimental to the interests of its depositors and other creditors;
(b)
has insufficient assets to cover its liabilities to the public; or
(c)
is contravening the provisions of this Act.
(3) The Authority may appoint any auditor, other than the auditor appointed by the finance company under section 205 of the Companies Act 1967, to exercise the powers of the Authority under subsections (1) and (2).
(4) For the purpose of an inspection or investigation under this section, a finance company must afford the Authority access to its books, accounts and documents and must give any information and facilities that may be required to conduct the investigation.
(5) No books, accounts and documents mentioned in subsection (4) are to be required to be produced at any time and at any place that would interfere with the proper conduct of the normal daily business of that finance company.
(6) If any book, account or document or information is not produced in accordance with subsection (4), the finance company concerned shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $10,000 and to a further fine of $1,000 for every day during which the default continues after conviction.
Information of insolvency, etc.
34.—(1) Any finance company which is or is likely to become insolvent, which is or is likely to become unable to meet its obligations, or which has suspended or is about to suspend payments, must immediately inform the Authority of that fact.[10/2013]
(2) Any finance company which contravenes subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $20,000 and, in the case of a continuing offence, to a further fine not exceeding $2,000 for every day or part of a day during which the offence continues after conviction.[10/2013]
Interpretation of sections 34A to 39
34A. In this section and sections 35 to 39, unless the context otherwise requires —“business” includes affairs and property;
“office holder”, in relation to a finance company, means any person acting as the liquidator, the provisional liquidator, the receiver or the receiver and manager of the finance company, or acting in an equivalent capacity in relation to the finance company;
“relevant business” means any business of a finance company —(a)
which the Authority has assumed control of under section 35; or
(b)
in relation to which a statutory adviser or a statutory manager has been appointed under section 35;
“statutory adviser” means a statutory adviser appointed under section 35;
“statutory manager” means a statutory manager appointed under section 35.[10/2013]
Action by Authority if finance company unable to meet obligations, etc.
35.—(1) The Authority may exercise any one or more of the powers specified in subsection (2) as appears to it to be necessary, where —(a)
a finance company informs the Authority that it is or is likely to become insolvent, or that it is or is likely to become unable to meet its obligations, or that it has suspended or is about to suspend payments;
(b)
a finance company becomes unable to meet its obligations, or is insolvent, or suspends payments;
(c)
the Authority is of the opinion that a finance company —(i)
is carrying on its business in a manner likely to be detrimental to the interests of its depositors or creditors;
(ii)
is or is likely to become insolvent, or is or is likely to become unable to meet its obligations, or is about to suspend payments;
(iii)
has contravened any of the provisions of this Act; or
(iv)
has failed to comply with any condition attached to its licence; or
(d)
the Authority considers it in the public interest to do so.[10/2013]
(2) Subject to subsection (1), the Authority may —(a)
require the finance company immediately to take any action or to do or not to do any act or thing whatsoever in relation to its business as the Authority may consider necessary;
(b)
appoint one or more persons as statutory adviser, on such terms and conditions as the Authority may specify, to advise the finance company on the proper management of such of the business of the finance company as the Authority may determine; or
(c)
assume control of and manage such of the business of the finance company as the Authority may determine, or appoint one or more persons as statutory manager to do so on such terms and conditions as the Authority may specify.[10/2013]
(3) Where the Authority appoints 2 or more persons as the statutory manager of a finance company, the Authority must specify, in the terms and conditions of the appointment, which of the duties, functions and powers of the statutory manager —(a)
may be discharged or exercised by such persons jointly and severally;
(b)
must be discharged or exercised by such persons jointly; and
(c)
must be discharged or exercised by a specified person or such persons.[10/2013]
(4) Where the Authority has exercised any power under subsection (2), it may, at any time and without affecting its power under section 15(1)(c)(ii), do one or more of the following:(a)
vary or revoke any requirement of, any appointment made by or any action taken by the Authority in the exercise of such power, on such terms and conditions as it may specify;
(b)
further exercise any of the powers under subsection (2);
(c)
add to, vary or revoke any term or condition specified by the Authority under this section.[10/2013]
(5) No liability shall be incurred by a statutory manager or a statutory adviser for anything done (including any statement made) or omitted to be done with reasonable care and in good faith in the course of or in connection with —(a)
the exercise or purported exercise of any power under this Act;
(b)
the performance or purported performance of any function or duty under this Act; or
(c)
the compliance or purported compliance with this Act.[10/2013]
(6) Any finance company that fails to comply with a requirement imposed by the Authority under subsection (2)(a) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $20,000 and, in the case of a continuing offence, to a further fine not exceeding $2,000 for every day or part of a day during which the offence continues after conviction.[10/2013]
Effect of assumption of control under section 35
36.—(1) Upon assuming control of the relevant business of a finance company, the Authority or statutory manager (as the case may be) must take custody or control of the relevant business.[10/2013]
(2) During the period when the Authority or statutory manager is in control of the relevant business of a finance company, the Authority or statutory manager —(a)
must manage the relevant business of the finance company in the name of and on behalf of the finance company; and
(b)
is deemed to be an agent of the finance company.[10/2013]
(3) In managing the relevant business of a finance company, the Authority or statutory manager —(a)
must take into consideration the interests of the depositors of the finance company; and
(b)
has all the duties, powers and functions of the members of the board of directors of the finance company (collectively and individually) under this Act, the Companies Act 1967 and the constitution of the finance company, including powers of delegation, in relation to the relevant business of the finance company; but nothing in this paragraph requires the Authority or statutory manager to call any meeting of the finance company under the Companies Act 1967 or the constitution of the finance company.[10/2013]
(4) Despite any written law or rule of law, upon the assumption of control of the relevant business of a finance company by the Authority or statutory manager, any appointment of a person as the chief executive or a director of the finance company, which was in force immediately before the assumption of control, is deemed to be revoked, unless the Authority gives its approval, by written notice to the person and the finance company, for the person to remain in the appointment.[10/2013]
(5) Despite any written law or rule of law, during the period when the Authority or statutory manager is in control of the relevant business of a finance company, except with the approval of the Authority, a person must not be appointed as the chief executive or a director of the finance company.[10/2013]
(6) Where the Authority has given its approval under subsection (4) or (5) to a person to remain in the appointment of, or to be appointed as, the chief executive or a director of a finance company, the Authority may at any time, by written notice to the person and the finance company, revoke that approval, and the appointment is deemed to be revoked on the date specified in the notice.[10/2013]
(7) Despite any written law or rule of law, if any person, whose appointment as the chief executive or a director of a finance company is revoked under subsection (4) or (6), acts or purports to act after the revocation as the chief executive or a director of the finance company during the period when the Authority or statutory manager is in control of the relevant business of the finance company —(a)
the act or purported act of the person is invalid and of no effect; and
(b)
the person shall be guilty of an offence.[10/2013]
(8) Despite any written law or rule of law, if any person who is appointed as the chief executive or a director of a finance company in contravention of subsection (5) acts or purports to act as the chief executive or a director of the finance company during the period when the Authority or statutory manager is in control of the relevant business of the finance company —(a)
the act or purported act of the person is invalid and of no effect; and
(b)
the person shall be guilty of an offence.[10/2013]
(9) During the period when the Authority or statutory manager is in control of the relevant business of a finance company —(a)
if there is any conflict or inconsistency between —(i)
a direction or decision given by the Authority or statutory manager (including a direction or decision to a person or body of persons referred to in sub‑paragraph (ii)); and
(ii)
a direction or decision given by any chief executive, director, member, executive officer, employee, agent or office holder, or the board of directors, of the finance company,
the direction or decision mentioned in sub‑paragraph (i) prevails over the direction or decision mentioned in sub‑paragraph (ii) to the extent of the conflict or inconsistency; and
(b)
a person must not exercise any voting or other right attached to any share in the finance company in any manner that may defeat or interfere with any duty, function or power of the Authority or statutory manager, and any such act or purported act is invalid and of no effect.[10/2013]
(10) Any person who is guilty of an offence under subsection (7) or (8) shall be liable on conviction to a fine not exceeding $20,000 or to imprisonment for a term not exceeding 3 years or to both and, in the case of a continuing offence, to a further fine not exceeding $2,000 for every day or part of a day during which the offence continues after conviction.[10/2013]
(11) In this section, “constitution”, in relation to a finance company, means the memorandum of association and articles of association of the finance company.[10/2013]
Duration of control
37.—(1) The Authority must cease to be in control of the relevant business of a finance company when the Authority is satisfied that —(a)
the reasons for the Authority’s assumption of control of the relevant business have ceased to exist; or
(b)
it is no longer necessary for the protection of the depositors of the finance company.[10/2013]
(2) A statutory manager is deemed to have assumed control of the relevant business of a finance company on the date of the statutory manager’s appointment as a statutory manager.[10/2013]
(3) The appointment of a statutory manager in relation to the relevant business of a finance company may be revoked by the Authority at any time —(a)
if the Authority is satisfied that —(i)
the reasons for the appointment have ceased to exist; or
(ii)
it is no longer necessary for the protection of the depositors of the finance company; or
(b)
on any other ground,
and upon such revocation, the statutory manager ceases to be in control of the relevant business of the finance company.
[10/2013]
(4) The Authority must, as soon as practicable, publish in the Gazette the date, and any other particulars that the Authority thinks fit, of —(a)
the Authority’s assumption of control of the relevant business of a finance company;
(b)
the cessation of the Authority’s control of the relevant business of a finance company;
(c)
the appointment of a statutory manager in relation to the relevant business of a finance company; and
(d)
the revocation of a statutory manager’s appointment in relation to the relevant business of a finance company.[10/2013]
Responsibilities of officers, member, etc., of finance company
38.—(1) During the period when the Authority or statutory manager is in control of the relevant business of a finance company —(a)
the General Division of the High Court may, on an application by the Authority or statutory manager, direct any person who has ceased to be or who is still any chief executive, director, member, executive officer, employee, agent, banker, auditor or office holder of, or trustee for, the finance company to pay, deliver, convey, surrender or transfer to the Authority or statutory manager, within such period as the General Division of the High Court may specify, any property, book, accounts, record or other documents, whether in electronic, print or other form, of the finance company which is comprised in, forms part of or relates to the relevant business of the finance company, and which is in the person’s possession or control; and
(b)
any person who has ceased to be or who is still any chief executive, director, member, executive officer, employee, agent, banker, auditor or office holder of, or trustee for, the finance company must give to the Authority or statutory manager such information as the Authority or statutory manager may require for the discharge of the Authority’s or statutory manager’s duties or functions, or the exercise of the Authority’s or statutory manager’s powers, in relation to the finance company, within such time and in such manner as may be specified by the Authority or statutory manager.[10/2013; 40/2019]
(2) Any person who —(a)
without reasonable excuse, fails to comply with subsection (1)(b); or
(b)
in purported compliance with subsection (1)(b), knowingly or recklessly provides any information or document that is false or misleading in a material particular,
shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $20,000 or to imprisonment for a term not exceeding 3 years or to both and, in the case of a continuing offence, to a further fine not exceeding $2,000 for every day or part of a day during which the offence continues after conviction.
[10/2013]
Remuneration and expenses of Authority and others in certain cases
39. The Authority may at any time fix the remuneration and expenses to be paid by a finance company —(a)
to a statutory manager or statutory adviser appointed in relation to the finance company, whether or not the appointment has been revoked; and
(b)
where the Authority has assumed control of the relevant business of the finance company, to the Authority and any person authorised or appointed by the Authority under section 42 in relation to the Authority’s assumption of control of the relevant business, whether or not the Authority has ceased to be in control of the relevant business.[10/2013]
Source: Singapore Statutes Online (Attorney-General's Chambers), © Government of Singapore.
