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Contents

Long Title

Part I PRELIMINARY

Part II ADMINISTRATION

Part III LICENSING OF ACTIVITIES RELATING TO GAS

Part IV MODIFICATION AND ENFORCEMENT OF GAS LICENCES

Part V GAS TRANSPORTERS

Part VI GAS RETAILERS AND GENERAL PROVISIONS

Part VII GAS NETWORK CODE

Part VIIA CODES OF PRACTICE

Part VIIB CONTROL OF GAS LICENSEES AND ENTITIES WITH INTEREST IN GAS PIPELINE NETWORK

Part VIII SAFETY

Part IX COMPETITION

Part X APPEAL PANEL

Part XI MISCELLANEOUS

Part XII TRANSITIONAL PROVISIONS

Legislative History

 
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On 19/04/2014, you requested the version in force on 19/04/2014 incorporating all amendments published on or before 19/04/2014. The closest version currently available is that of 14/02/2008.
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PART VIIB
CONTROL OF GAS LICENSEES AND ENTITIES WITH INTEREST IN GAS PIPELINE NETWORK
Interpretation of this Part
63A.
—(1)  In this Part, unless the context otherwise requires ––
“12% controller”, in relation to a designated gas licensee, designated entity or designated business trust, means a person, not being a 30% controller, who, alone or together with his associates —
(a)
holds 12% or more of the total equity interests in; or
(b)
is in a position to control 12% or more of the voting power in,
the designated gas licensee, designated entity or designated business trust;
“30% controller”, in relation to a designated gas licensee, designated entity or designated business trust, means a person who, alone or together with his associates —
(a)
holds 30% or more of the total equity interests in; or
(b)
is in a position to control 30% or more of the voting power in,
the designated gas licensee, designated entity or designated business trust;
“arrangement” includes any formal or informal scheme, arrangement or understanding, and any trust whether express or implied;
“business trust” has the same meaning as in section 2 of the Business Trusts Act (Cap. 31A);
“chief executive officer”, in relation to a designated gas licensee, means any person, by whatever name described, who —
(a)
is in the direct employment of, or acting for or by arrangement with, the designated gas licensee; and
(b)
is principally responsible for the management and conduct of any type of business of the designated gas licensee,
and includes any person for the time being performing any or all of the functions or duties of a chief executive officer;
“company” has the same meaning as in section 4(1) of the Companies Act (Cap. 50);
“corporation” has the same meaning as in section 4(1) of the Companies Act;
“designated business trust” means a business trust that is established wholly or partly in respect of a gas pipeline network (or any part thereof) and which has been declared by the Authority, by notification in the Gazette, to be a designated business trust for the purposes of this Part;
“designated entity” means an entity, not being a designated gas licensee, which owns a gas pipeline network (or any part thereof) and which has been declared by the Authority, by notification in the Gazette, to be a designated entity for the purposes of this Part;
“designated gas licensee” means a gas transporter or a gas transport agent;
“entity” includes a corporation and a limited liability partnership;
“equity interest” means —
(a)
in relation to a body corporate, a voting share in that body corporate;
(b)
in relation to an entity other than a body corporate, any right or interest, whether legal or equitable, in that entity, by whatever name called, which gives the holder of that right or interest voting power in that entity; and
(c)
in relation to a business trust, a unit in that business trust;
“indirect controller”, in relation to a designated gas licensee, designated entity or designated business trust, means any person, whether acting alone or together with any other person, and whether with or without holding equity interests or controlling the voting power in the designated gas licensee, designated entity or designated business trust —
(a)
in accordance with whose directions, instructions or wishes the directors or other officers of the licensee, the entity or the trustee-manager of the business trust, as the case may be, are accustomed or under an obligation, whether formal or informal, to act; or
(b)
who is in a position to determine the policy of the licensee, the entity or the trustee-manager of the business trust,
but does not include —
(i)
in the case of the licensee, any person who is a director or other officer of the licensee and whose appointment as such has been approved by the Authority under section 63H; or
(ii)
any person in accordance with whose directions, instructions or wishes the directors or other officers of the licensee, the entity or the trustee-manager of the business trust, as the case may be, are accustomed to act by reason only that they act on advice given by him in his professional capacity;
“limited liability partnership” has the same meaning as in section 2(1) of the Limited Liability Partnerships Act (Cap. 163A);
“related corporation”, in relation to a corporation, means a corporation that is deemed to be related to the first-mentioned corporation under section 6 of the Companies Act (Cap. 50);
“share” has the same meaning as in section 4(1) of the Companies Act;
“substantial equity interest holder” means —
(a)
in relation to a company, a substantial shareholder of that company;
(b)
in relation to an entity other than a company, a person who has an interest or interests in equity interests in that entity representing 5% or more of the total voting rights of all the persons who hold equity interests in that entity; and
(c)
in relation to a business trust, a person who has an interest or interests in units in that business trust representing 5% or more of the total voting rights of all the unitholders of the business trust;
“substantial shareholder” has the same meaning as in section 81 of the Companies Act (Cap. 50);
“treasury share” has the same meaning as in section 4(1) of the Companies Act;
“trustee-manager” has the same meaning as in section 2 of the Business Trusts Act (Cap. 31A);
“unit” has the same meaning as in section 2 of the Business Trusts Act;
“unitholder” has the same meaning as in section 2 of the Business Trusts Act;
“voting share” has the same meaning as in section 4(1) of the Companies Act but does not include a treasury share;
“written law” means the Companies Act or the Business Trusts Act.
(2)  In this Part, a person holds an equity interest if —
(a)
he is deemed to have an interest in that equity interest in accordance with subsection (3); or
(b)
he otherwise has a legal or an equitable interest in that equity interest except for such interest as is to be disregarded in accordance with subsection (3).
(3)  In determining whether —
(a)
a person is deemed to have an interest in an equity interest; or
(b)
any interest is to be disregarded,
section 7(6) to (10) of the Companies Act (Cap. 50) shall apply as if the reference to a share in those provisions of that section is a reference to an equity interest.
(4)  A reference in this Part to the control of a percentage of the voting power in a designated gas licensee, designated entity or designated business trust is 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 designated gas licensee, designated entity or designated business trust.
(5)  In this Part, a person, A, is an associate of another person, B, if —
(a)
A is the spouse, or a parent, step-parent or remoter lineal ancestor, or a son, step-son, daughter, step-daughter or remoter issue, or a brother or sister, of B;
(b)
A is a corporation whose directors are accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of B, or, where B is a corporation, of the directors of B;
(c)
B is a corporation whose directors are accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of A or, where A is a corporation, of the directors of A;
(d)
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 or, where B is a corporation, of the directors of B;
(e)
B 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 A or, where A is a corporation, of the directors of A;
(f)
A is a related corporation of B;
(g)
A is a corporation in which B, alone or together with other associates of B as described in paragraphs (b) to (f), is in a position to control not less than 20% of the voting power in A;
(h)
B is a corporation in which A, alone or together with other associates of A as described in paragraphs (b) to (f), is in a position to control not less than 20% of the voting power in B; or
(i)
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 equity interests or other interests in, or with respect to the exercise of their voting power in relation to, a designated gas licensee, designated entity or designated business trust.
Control of equity interests and voting power in, and business of, designated gas licensee, designated entity and designated business trust
63B.
—(1)  Any person who becomes a substantial equity interest holder of a designated gas licensee, designated entity or designated business trust shall give notice in writing to the Authority of that fact within 5 days after becoming a substantial equity interest holder of the licensee, entity or business trust.
(2)  No person shall become a 12% controller, a 30% controller or an indirect controller of a designated gas licensee, designated entity or designated business trust unless the person obtains the prior written approval of the Authority.
(3)  No person, whether or not he has obtained any approval of the Authority under subsection (2) or is exempted from subsection (2) under section 63D, shall acquire as a going concern —
(a)
the business (or any part thereof) of a designated gas licensee conducted pursuant to its licence;
(b)
the business (or any part thereof) of a designated entity relating to a gas pipeline network or any part thereof owned by the entity; or
(c)
the business (or any part thereof) of a designated business trust relating to a gas pipeline network or any part thereof in respect of which, wholly or in part, the business trust is established,
unless the person, and the licensee, the entity or the trustee-manager of the business trust, as the case may be, obtain the prior written approval of the Authority.
(4)  Subject to subsection (5), a notice under subsection (1) shall be given and an application for the Authority’s approval under subsection (2) or (3) shall be made in such form and manner as may be specified by the Authority.
(5)  An application for the Authority’s approval under subsection (3) shall be made jointly by the person, and the designated gas licensee, the designated entity or the trustee-manager of the designated business trust, as the case may be.
Approval of applications under section 63B
63C.
—(1)  The Authority may approve an application of a person for the Authority’s approval under section 63B(2) if the Authority is satisfied that —
(a)
the person is a fit and proper person;
(b)
having regard to the person’s likely influence —
(i)
the designated gas licensee or designated entity, as the case may be, will continue to conduct its business prudently and comply with the provisions of this Act; or
(ii)
the trustee-manager of the designated business trust will continue to conduct the business of the business trust prudently and comply with the provisions of this Act; and
(c)
it is in the public interest to do so.
(2)  The Authority may approve an application for the Authority’s approval under section 63B(3) if the Authority is satisfied that —
(a)
the person acquiring the business is a fit and proper person;
(b)
the acquisition will not affect the security or reliability of the conveyance of gas to consumers’ premises; and
(c)
it is in the public interest to do so.
(3)  Any approval granted by the Authority under this section shall be without prejudice to the operation of Part IX.
(4)  Any approval by the Authority under this section may be granted subject to such conditions as the Authority may determine, including but not limited to any condition —
(a)
restricting the disposal or further acquisition of equity interests or voting power in the designated gas licensee, designated entity or designated business trust; or
(b)
restricting the exercise of voting power in the designated gas licensee, designated entity or designated business trust.
(5)  The Authority may at any time add to, vary or revoke any condition imposed under this section.
(6)  Any condition imposed under this section shall have effect notwithstanding any written law or anything contained in the memorandum or articles of association, trust deed or other constitution of the designated gas licensee, designated entity or designated business trust.
Power to exempt
63D.  The Authority may, by order published in the Gazette, exempt —
(a)
any person or class of persons; or
(b)
any class or description of equity interests,
from section 63B(1), (2) or (3), subject to such conditions as may be specified in the order.
Power to issue directions
63E.
—(1)  The Authority may issue any direction under subsection (2) or (3), as the case may be, to a person if the Authority is satisfied that —
(a)
the person has contravened section 63B(2) or (3);
(b)
in the case of a person who has obtained the Authority’s approval under section 63B(2) or who has been exempted from section 63B(2) under section 63D —
(i)
the person is not or ceases to be a fit and proper person;
(ii)
having regard to the person’s likely influence —
(A)
the designated gas licensee or designated entity, as the case may be, is not, or is no longer, likely to conduct its business prudently or to comply with the provisions of this Act; or
(B)
the trustee-manager of the designated business trust is not, or is no longer, likely to conduct the business of the business trust prudently or to comply with the provisions of this Act; or
(iii)
it is not, or is no longer, in the public interest to allow the person to continue to be a 12% controller, a 30% controller or an indirect controller, as the case may be;
(c)
in the case of a person who has obtained the Authority’s approval under section 63B(3) or who has been exempted from section 63B(3) under section 63D, and who has acquired as a going concern a business referred to in section 63B(3) —
(i)
the person is not or ceases to be a fit and proper person; or
(ii)
it is not, or is no longer, in the public interest to allow the person to continue to own or manage that business;
(d)
the person has furnished false or misleading information or documents to the Authority in connection with the person’s application for the Authority’s approval under section 63B(2) or (3);
(e)
the Authority would not have approved the person’s application for its approval under section 63B(2) or (3) had it been aware, at that time, of circumstances relevant to the application; or
(f)
any condition imposed on the person under section 63C or 63D has not been complied with.
(2)  Where the person is a 12% controller, a 30% controller or an indirect controller of a designated gas licensee, designated entity or designated business trust, the Authority may, by notice in writing —
(a)
direct the person to take such steps as are necessary, within such period as may be specified by the Authority, to ensure that he ceases to be a 12% controller, a 30% controller or an indirect controller of the licensee, entity or business trust;
(b)
direct the person or any of his associates to transfer or dispose of any or all of the equity interests in the licensee, entity or business trust held by the person or his associate (referred to in this section and section 63F as the specified equity interests) within such time and subject to such conditions as the Authority considers appropriate;
(c)
restrict the transfer or disposal of the specified equity interests; or
(d)
make such other direction as the Authority considers appropriate.
(3)  Where the person has acquired as a going concern a business referred to in section 63B(3), the Authority may, by notice in writing —
(a)
direct the person to transfer or dispose of the business or any part thereof within such time and subject to such conditions as the Authority considers appropriate;
(b)
restrict the transfer or disposal of the business or any part thereof; or
(c)
make such other direction as the Authority considers appropriate.
(4)  Before issuing any direction to any person under subsection (2) or (3), the Authority shall, unless the Authority decides that it is not practicable or desirable to do so, give to that person notice in writing of the Authority’s intention to issue the direction and specifying a date by which the person may make written representations with regard to the proposed direction.
(5)  Upon receipt of any written representation referred to in subsection (4), the Authority shall consider it for the purpose of determining whether to issue the direction.
(6)  Any person to whom a direction is issued under this section shall comply with the direction.
(7)  The Authority may at any time vary or revoke any direction issued under this section.
Effect of directions
63F.
—(1)  Any direction issued by the Authority to any person under section 63E shall take effect notwithstanding any written law or anything contained in the memorandum or articles of association, trust deed or other constitution of the designated gas licensee, designated entity or designated business trust, as the case may be.
(2)  Where any direction is issued under section 63E(2)(b) or (c), notwithstanding any written law or anything contained in the memorandum or articles of association, trust deed or other constitution, of the designated gas licensee, designated entity or designated business trust, as the case may be —
(a)
no voting rights shall be exercisable in respect of the specified equity interests unless the Authority expressly permits such rights to be exercised;
(b)
no equity interests in the licensee, entity or business trust shall be issued or offered (whether by way of rights, bonus or otherwise) in respect of the specified equity interests unless the Authority expressly permits such issue or offer; and
(c)
except in a winding up of the licensee, entity or business trust, no payment shall be made by the licensee, entity or trustee-manager of the business trust of any amount (whether by way of dividends or otherwise) in respect of the specified equity interests unless the Authority expressly authorises such payment,
until the transfer or disposal is effected in accordance with the direction or until the restriction on the transfer or disposal is removed, as the case may be.
Offences, penalties and defences
63G.
—(1)  Any person who contravenes section 63B(1), (2) or (3) or 63E(6) shall be guilty of an offence and shall be liable on conviction —
(a)
in the case of an individual, to a fine not exceeding $500,000 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 $50,000 for every day or part thereof during which the offence continues after conviction; or
(b)
in any other case, to a fine not exceeding $1 million and, in the case of a continuing offence, to a further fine not exceeding $100,000 for every day or part thereof during which the offence continues after conviction.
(2)  Where a person is charged with an offence in respect of a contravention of section 63B(1), it shall be a defence for the person to prove that —
(a)
he was not aware that he had contravened section 63B(1); and
(b)
he has, within 5 days after becoming aware that he had contravened section 63B(1), notified the Authority of the contravention.
(3)  Where a person is charged with an offence in respect of a contravention of section 63B(2), it shall be a defence for the person to prove that —
(a)
he was not aware that he had contravened section 63B(2); and
(b)
he has, within 14 days of becoming aware that he had contravened section 63B(2), notified the Authority of the contravention and, within such time as may be determined by the Authority, taken such actions in relation to his holding of equity interests or control of the voting power in the designated gas licensee, designated entity or designated business trust as the Authority may direct.
(4)  Where a person is charged with an offence in respect of a contravention of section 63B(2), it shall also be a defence for the person to prove that, even though he was aware of the contravention —
(a)
the contravention occurred as a result of an increase in the holding of equity interests, or in the voting power controlled, by any of his associates described in section 63A(5)(a) in the designated gas licensee, designated entity or designated business trust;
(b)
he has no agreement or arrangement, whether oral or in writing and whether express or implied, with that associate with respect to the acquisition, holding or disposal of equity interests or other interests in, or under which they act together in exercising their voting power in relation to, the designated gas licensee, designated entity or designated business trust; and
(c)
he has, within 14 days of the date of the contravention, notified the Authority of the contravention and, within such time as may be determined by the Authority, taken such actions in relation to his holding of equity interests or control of the voting power in the designated gas licensee, designated entity or designated business trust as the Authority may direct.
(5)  Except as provided in subsections (2), (3) and (4), it shall not be a defence for a person charged with an offence in respect of a contravention of section 63B(1) or (2) to prove that he did not intend to or did not knowingly contravene section 63B(1) or (2).
Appointment of chief executive officer, director, etc., of designated gas licensee
63H.
—(1)  No designated gas licensee shall appoint a person as its chief executive officer, its director or the chairman of its board of directors unless it has obtained the prior written approval of the Authority.
(2)  Where a person has been appointed by a designated gas licensee as its chief executive officer, its director or the chairman of its board of directors in contravention of subsection (1), the Authority may issue a direction to the licensee to remove that person as its chief executive officer, its director or the chairman of its board of directors, as the case may be.
(3)  This section shall have effect notwithstanding the Companies Act (Cap. 50) or anything contained in the memorandum or articles of association, or other constitution, of the designated gas licensee.