[Ch4608s70]70.     Compromises and arrangements involving prudentially regulated non-bank financial institutions

            (1) In this section-

            "compromise or arrangement" means-

     (a)     a compromise or arrangement in relation to a prudentially regulated non-bank financial institution, being a compromise or arrangement of a kind described in sections 232 and 234 of the Companies Act Cap. 42:01; and

     (b)     any other arrangement (however described) for the amalgamation of a prudentially regulated non-bank financial institution with one or more other bodies corporate or the reconstruction of a prudentially regulated non-bank financial institution.

            (2) Each prudentially regulated non-bank financial institution concerned in a proposed compromise or arrangements shall ensure that a copy of-

     (a)     all applications to a court; and

     (b)     all documents to be given to members or creditors of the bodies corporate involved, either in relation to a meeting of members or creditors or otherwise;

are given to the Regulatory Authority before the application is made or the documents are sent to the members or creditors.

            (3) The Regulatory Authority is entitled to be heard in any proceeding in a court in relation to a compromise or arrangement.

            (4) A court shall not make an order in terms of section 232 or 234 of the Companies Act Cap. 42:01, or any order to a similar effect, in relation to a compromise or arrangement unless the Regulatory Authority has approved the compromise or arrangement in writing.

            (5)        Subsection (4) does not apply to an interlocutory or similar order.

            (6) Regulations may make further provision about compromises and arrangements.

[Ch4608s71]71.     Transfers of business of prudentially regulated non-bank financial institutions

            (1) None of the business of a prudentially regulated financial institution, being business in respect of which it is licensed, may be transferred to another person or amalgamated with the business of another person except under a scheme for the transfer or amalgamation that has been approved by the Regulatory Authority.

            (2) A purported transfer or amalgamation contrary to subsection (1) is void.

[Ch4608s72]72.     Sections 70 and 71 prevail over Companies Act

            If there is an inconsistency between a provision of section 70 or 71 and the Companies Act Cap. 42:01, the provisions of section 70 or 71 prevail to the extent of the inconsistency.

Statutory management (ss 73-75)

[Ch4608s73]73.     Appointment of statutory managers

            (1) The High Court may, on application, appoint a person to be the statutory manager of a prudentially regulated non-bank financial institution.

            (2) The application may only be made by the Regulatory Authority or with the Regulatory Authority's written consent.

            (3) The High Court may only make the appointment-

     (a)     if satisfied that the institution requested the appointment; or

     (b)     if it appears to the Court that the institution-

           (i)       is not complying with a financial services law;

          (ii)       is or is likely to be in an unsound financial position; or

          (iii)       is or may be involved in financial crime;

and the Court considers it in the interests of the clients of the institution or the financial system to make the appointment.

            (4) Subject to subsection (5) the Regulatory Authority may appoint a person to be the statutory manager of a prudentially regulated non-bank financial institution but only if it appears to the Regulatory Authority that-

     (a)     the institution-

           (i)       is not complying with a financial services law;

          (ii)       is or is likely to be in an unsound financial position; or

          (iii)       is or may be involved in financial crime; and

     (b)     it is necessary to appoint a statutory manager urgently to protect-

           (i)       the interests of the clients of the institution;

          (ii)       the stability, fairness, efficiency and orderliness of the financial system; or

          (iii)       the safety and soundness of financial institutions.

            (5) An appointment in terms of subsection (4) takes effect immediately, but the Regulatory Authority shall, as soon as practicable after the appointment and in any event within five business days after the appointment, apply to the High Court for an order confirming the appointment.

            (6) On the application, the High Court shall, by order, confirm the appointment unless satisfied that the Regulatory Authority was not entitled to make the appointment, or that the grounds for making the appointment no longer exist.

            (7) On an application in terms of this section, the High Court may also make further ancillary orders, including as to costs, as is just.

[Ch4608s74]74.     Statutory management

            (1) A person is not to be appointed or hold office as a statutory manager of a prudentially regulated non-bank financial institution unless the Regulatory Authority has approved the person as the statutory manager of the institution.

            (2) The statutory manager of a prudentially regulated non-bank financial institution shall-

     (a)     manage the affairs of the institution to the exclusion of its directors and other managers;

     (b)     have power to repudiate a contract to which the institution is a party, but only if the statutory manager considers the contract detrimental to the interests of clients of the institution; and

     (c)     be entitled to receive such remuneration from the institution as the High Court orders.

            (3) A repudiation of a contract in terms of paragraph (b) of subsection (2) does not affect any rights of the parties that have accrued before the repudiation.

            (4) The statutory manager of a prudentially regulated non-bank financial institution shall manage the affairs of the institution with the greatest economy possible compatible with efficiency and, as soon as practicable, shall report to the Regulatory Authority-

     (a)     what steps should be taken to ensure that the institution-

           (i)       complies with the financial services laws; or

          (ii)       will be financially sound; or

          (iii)       will not be involved in financial crime;

     (b)     if the statutory manager considers that it is not practicable to take steps as mentioned in paragraph (a)-

           (i)       whether steps should be taken to transfer the business of the institution to another appropriate person and, if so, to whom and on what terms; and

          (ii)       whether the institution should be wound up.

            (5) The statutory manager of a prudentially regulated non-bank financial institution shall comply with written directions from the Regulatory Authority in relation to his or her functions.

            (6) The statutory manager of a prudentially regulated non-bank financial institution may apply to the High Court at any time for directions.

            (7) The Regulatory Authority may at any time remove a statutory manager from office, and appoint a replacement, for whom the Regulatory Authority shall apply to court for an order confirming the appointment in terms of section 73 (5).

            (8) The statutory manager of a prudentially regulated non-bank financial institution is not liable for a loss that the institution suffers unless it is established that the loss was caused by the statutory manager's fraud, dishonesty, negligence or wilful failure to comply with the law.

[Ch4608s75]75.     Termination of statutory management

            If a statutory manager is appointed to a prudentially regulated non-bank financial institution, the Regulatory Authority shall ensure that such a statutory manager remains appointed until the earlier of the times when-

     (a)     the Regulatory Authority is satisfied that the grounds for making the appointment no longer exist;

     (b)     the Regulatory Authority applies for the institution to be wound up on the basis that it considers that the institution is insolvent and is unlikely to return to solvency within a reasonable time.

Winding up (s 76)

[Ch4608s76]76.     Winding up prudentially regulated non-bank financial institutions

            (1) A resolution, demand or other step to wind up a prudentially regulated non-bank financial institution is of no effect unless the Regulatory Authority has approved of such action.

            (2) The Regulatory Authority may apply to the court for an order that a prudentially regulated non-bank financial institution be wound up if-

     (a)     a statutory manager has been appointed to the institution; and

     (b)     the Regulatory Authority is satisfied that the institution is insolvent and cannot be restored to solvency within a reasonable period.

            (3) An application to a court for the winding up of a prudentially regulated non-bank financial institution (whether under the Companies Act Cap. 42:01 or under another law) is not to be made except by the Regulatory Authority or with its approval.

            (4) The Regulatory Authority shall not give approval in terms of subsection (3) unless-

     (a)     the regulated non-bank financial institution's licence has been or is to be revoked; or