Long Title

Part I PRELIMINARY

Part II LICENSING OF FINANCE COMPANIES

Part III RESERVE FUNDS, DIVIDENDS, BALANCE-SHEETS AND INFORMATION

Part IV REGULATION OF BUSINESS

Part V MINIMUM LIQUID ASSETS

Part VI INSPECTION AND CONTROL OF FINANCE COMPANIES

Part VII SUBMISSION OF ACCOUNTS AND DUTIES OF AUDITORS

Part VIII MISCELLANEOUS

Legislative History

Comparative Table

PART III
RESERVE FUNDS, DIVIDENDS, BALANCE-SHEETS AND INFORMATION
Maintenance of reserve fund by finance companies
18.
—(1)  Every finance company shall —
(a)
maintain a reserve fund;
(b)
transfer to that reserve fund out of the net profits of each year, after due provision has been made for taxation —
(i)
so long as the amount of the reserve fund is less than 50% of the paid-up capital, a sum not less than 50% of those net profits;
(ii)
so long as the amount of the reserve fund is not less than 50% but less than 100% of the paid-up capital, a sum not less than 25% of those net profits; and
(iii)
so long as the amount of the reserve fund is 100% or more of the paid-up capital, a sum not less than 5% of those net profits.
[27/94]
(2)  Any finance company which fails to comply with 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 of $2,000 for every day during which the offence continues after conviction.
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Maintenance of adequate provision for bad and doubtful debts
18A.  Every finance company shall make provision for bad and doubtful debts and, before any profit or loss is declared, ensure that the provision is adequate.
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Restriction on payment of dividends by finance companies
19.  No finance company shall pay any dividend on its shares until all its capitalised expenditure (including preliminary expenses, organisation expenses, share selling commission, brokerage, amount of losses incurred and any item of expenditure not represented by tangible assets) has been completely written off.
Publication and exhibition of audited balance-sheet
20.
—(1)  Every finance company shall exhibit in a conspicuous position in each of its offices and branches in Singapore —
(a)
a copy of its latest audited annual balance-sheet and profit and loss account, together with any notes thereon, and a copy of the report of the auditors; and
(b)
the full and correct names of all persons who are directors for the time being of the finance company.
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(2)  Every finance company shall, within 6 months after the close of each financial year or within such period as the Authority may approve, publish in at least 4 local daily newspapers, one each published in the Malay, Chinese, Tamil and English languages, a copy of its latest audited annual balance-sheet and profit and loss account, containing at least such information as the Authority may require by notice in writing.
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(3)  The Authority may by notice in writing require a finance company to publish, in addition to its balance-sheet and profit and loss account under subsection (2), such additional information relating to the accounts of that finance company for any financial year as the Authority thinks fit.
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(4)  A copy of the documents referred to in subsections (1) and (2) shall be sent to the Authority by the finance company, prior to its first publication in any newspaper under those subsections, together with a copy of the directors’ report.
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(5)  The annual balance-sheet and profit and loss account of the finance company referred to in subsections (1) and (2) and the half year interim profit and loss account of the finance company shall be in such form as the Authority may approve.
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(6)  The Authority may require any finance company to submit such further or additional information as it may consider necessary either by way of explanation, amplification or otherwise with regard to the balance-sheet and profit and loss account sent by that finance company under subsection (4) and that information shall be submitted within such period and in such manner as the Authority may require.
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(7)  Any finance company which fails to comply with any of the provisions of this section shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $5,000 and, in the case of a continuing offence, to a further fine of $1,000 for every day during which the offence continues after conviction.
[27/94]
Information and statistics to be furnished by finance companies
21.
—(1)  Every finance company shall furnish to the Authority at such time and in such manner as the Authority may prescribe, all such information and data as the Authority may reasonably require for the proper discharge of the Authority’s functions under the provisions of this Act.
(2)  Nothing in this Act shall authorise the Authority to enquire specifically into the affairs of an individual depositor of a finance company and any information relating to the affairs of that individual depositor obtained by the Authority in the course of an inspection or investigation made under this Act shall be secret between the Authority and that finance company.
(3)  Every finance company which fails or neglects to furnish any information required by the Authority under subsection (1) within the time specified by the Authority shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $5,000 for every day during which the default continues after conviction.
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Monthly statements of advances, loans and credit facilities
21A.
—(1)  Every finance company shall send to the Authority, not later than 15 days after the last day of each month, a statement in the form determined by the Authority showing the particulars of all advances, loans and credit facilities granted by the finance company as at the end of that month to —
(a)
any of the directors of the finance company;
(b)
any firm or limited liability partnership in which the finance company or any of its directors is a partner, manager or agent;
(c)
any individual or firm or limited liability partnership of whom or of which any of the directors of the finance company is a guarantor;
(d)
any corporation that is related to the finance company;
(e)
any of the finance company’s officers, employees or other persons receiving remuneration from the finance company (other than persons receiving remuneration in respect of their professional services);
(f)
any private or public company in which the finance company or any of its directors, officers, employees or other persons who receive remuneration from the finance company has an interest as a director, manager, agent or guarantor; or
(g)
any individual in whom, and any firm or limited liability partnership or company in which, any of the directors of the finance company has, directly or indirectly, such interest as is required to be declared under section 21B, other than those advances, loans and credit facilities, the particulars of which have been supplied under paragraphs (a) to (f).
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(2)  Where it appears to the Authority, on examination of the particulars supplied by a finance company under subsection (1), that any advance, loan or credit facility has been or may be granted to the detriment of the interests of the depositors of the finance company (referred to in this subsection as the advance, loan or credit facility), the Authority may as it thinks fit by notice in writing —
(a)
prohibit that finance company from granting any further advance, loan or credit facility to the borrowers which in the Authority’s opinion may be detrimental to the interest of the depositors;
(b)
impose restrictions on that finance company in relation to the grant of any advance, loan or credit facility; or
(c)
direct that finance company to secure repayment of any advance, loan or credit facility.
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(3)  In this section —
(a)
“director” includes the wife, husband, mother, father, son or daughter of a director; and
(b)
whether a corporation is related to a finance company shall be construed in accordance with section 6 of the Companies Act (Cap. 50).
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Disclosure of interest by directors
21B.
—(1)  Subject to this section, every director of a finance company who is in any way, directly or indirectly, interested in an advance, loan or credit facility or proposed advance, loan or credit facility from that finance company shall, as soon as practicable, declare the nature of his interest to the board of directors of that finance company and the secretary of the company shall cause the declaration to be circulated forthwith to all the directors.
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(2)  Subsection (1) shall not apply in any case where the interest of the director of a finance company consists only of being a member or creditor of a company which is interested in an advance, loan or credit facility or proposed advance, loan or credit facility from that finance company if the interest of the director may properly be regarded as not being a material interest.
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(3)  For the purposes of subsection (1), a general notice given to the board of directors of a finance company by a director to the effect that he is an officer or member of a specified company or a member of a specified firm or partner or manager of a specified limited liability partnership and he is to be regarded as having an interest in any advance, loan or credit facility which may, after the date of the notice, be made to that company, firm or limited liability partnership shall be deemed to be a sufficient declaration of interest in relation to any advance, loan or credit facility so made if —
(a)
it specifies the nature and extent of his interest in the particular company, firm or limited liability partnership;
(b)
his interest is not different in nature or greater in extent than the nature and extent so specified in the notice at the time any advance, loan or credit facility is made; and
(c)
it is given at a meeting of the directors or the director takes reasonable steps to ensure that it is brought up and read at the next meeting of the directors after it is given.
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(4)  Every director of a finance company who holds any office or possesses any property whereby, directly or indirectly, duties or interests might be created in conflict with his duties or interests as director shall declare at a meeting of the directors of that finance company the fact and the nature, character and extent of such conflict.
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(5)  The declaration referred to in subsection (4) shall be made at the first meeting of the directors held —
(a)
after he becomes a director of the finance company; or
(b)
if already a director, after he commences to hold the office or to possess the property.
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(6)  The secretary of a finance company shall cause to be brought up and read any declaration made under subsection (1) or (4) at the next meeting of the directors of that finance company after it is made, and shall record any declaration so made in the minutes of the meeting at which it was made or at which it was brought up and read.
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(7)  Any director who contravenes subsection (1) or (4) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $50,000 or to imprisonment for a term not exceeding 3 years or to both.
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