OF THE

REPUBLIC OF NAMIBIA N$O,90 WINDHOEK - 11 November 1994 No. 967

CONTENTS Page

GOVERNMENT NOTICE

No. 207 Promulgation of Building Societies Amendment Act, 1994 (Act 25 of 1994), of the Parliament . .

Government Notice

OFFICE OF THE PRIME MINISTER

No. 207 1994

PROMULGATION OF ACT OF PARLIAMENT

The following Act which has been passed by the Parliament and signed by the President in terms of the Namibian Constitution is hereby published in terms of Article 56 of that Constitution.

No. 2S of 1994: Building Societies Amendment Act, 1994.

2 Government Gazette 11 November 1994 No. 967 Act No. 25, 1994

Substitution of heading of Chapter V II of Act 2 of I9X6.

Insertion of section 52A in Chapter V II of Act 2 of 199b.

BUILDING SOCIETIES AMENDMENT ACT, 1994

EXPLANATORY NOTE: Words underlined with solid line indicate in- sertions in existing enactments. Words in bold type in square brackets indicate omissions from existing enactments.

ACT To amend the Building Societies Act, 1986, so as to re-

gulate the amalgamation of building societies and the transfer of their assets and liabilities; and to provide for matters incidental thereto.

(Signed by the President on 27 October 1994)

BE IT ENACTED by the Parliament of the Republic of Namibia, as follows:-

1. The following heading is hereby substituted for the heading of Chapter VII of the Building Societies Act, 1986:

"AMALGAMATION, TRANSFER OF ASSETS AND LIABILITIES, JUDICIAL MANAGEMENT, WINDING-UP AND DISSOLUTION".

2. The following section is hereby inserted before section 53 in Chapter VII of the Building Societies Act, 1986:

"Amalgama- tion and transfer of assets and liahilitics.

52A. 1 If the rior written a - proval of the Minister has been obtained therefor -

(a) two or more societies may amalgamate to become one society;

(b) a society may transfer all or part of its assets and liabilities to another society or to a bank.

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(2) The proposed agreement em- bodying the terms and conditions of any amalgamation or transfer of assets and liabilities as contemplated in subsection (1), shall be furnished in advance to the registrar who shall submit such pro- posed agreement to the Minister, to- gether with any recommendations which the registrar considers necessary or expedient to make in connection therewith.

(3) The Minister may, with due regard to any recommendations made by the registrar, and subject to sub- section (4) -

(a) grant approval for the pro- posed amalgamation or trans- fer on the terms and conditions as set out in the proposed agreement; or

(b) if the Minister considers it necessary that any modifica- tions should be made to such terms and conditions, refer the proposed agreement back to the parties concerned for re- consideration in the light of the modifications suggested by the Minister.

(4) The Minister shall not grant his or her approval for any amalgamation or transfer of assets and liabilities under subsection (3)(a), unless the Minister is satisfied -

(a) that such transaction will not be detrimental to the public interest or cause undue hard- ship to the members of any of the parties involved in the proposed amalgamation or transfer of assets and liabili- ties, as the case may be; and

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(a) the Minister has granted his or her approval therefor under subsection (3)(a); and

(b) in the case of an amalgamation of societies or the transfer of assets and liabilities from one society to another society, that the proposed agreement spe- cifically provides that there shall be no division of the profits or of any of the reserves of the societies concerned among their members, but subject to subsection (15).

(5) No transaction involving an amalgamation or transfer of assets and liabilities contemplated in subsection (1) shall be of any force and effect unless -

(b) the provisions of the agree- ment for the contemplated amalgamation or transfer is confirmed by special resolu- tion of the members or share- holders, as the case may be, of each of the parties involved in the amalgamation or transfer.

(6) The notice convening a special general meeting for the confirmation by special resolution of any such amal- gamation or transfer, as required by subsection (5)(b), shall contain or have attached to it the complete terms and conditions of the relevant agreement as approved by the Minister, whether with or without modifications.

(7) Notice of the passing of the special resolution as required by sub- section (5)(b), together with a copy of such resolution and the full terms and conditions of the proposed amalgama- tion or transfer, duly certified by two directors and the secretary of each of the parties concerned, shall be sent by each of those parties to the registrar and shall

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(i) where all the assets and liabilities of the society are transferred, that society shall be deemed to be dis- solved and its registration shall be cancelled by the registrar;

(8) The amalgamation or transfer shall take place upon the terms and conditions set forth in such resolution.

(9) Upon registration by the regi- strar of the appropriate notices referred to in subsection (7) -

(a) in the case of an amaigama- tion of societies -

(i) the individual societies in- volved in the amalgama- tion shall be deemed to be dissolved and the registrar shall cancel their registra- tion, register the new so- ciety as a building society and issue to such society the relevant certificate of registration in accordance with subsection (10); and

(ii) all the assets and liabilities of the societies involved in the amalgamation shall become the assets and lia- bilities of the new society registered in their stead;

(b) in the case of a transfer of assets and liabilities of a society to another society or to a bank -

(ii) all the assets and liabilities of the society giving trans- fer which are included in such transfer shall become the assets and liabilities of the society or the bank to

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(10) A registration In terms of subsection (9)(a)(i) shall -

(a) where all the parties to the amalgamation in question were finally registered as societies, be a final registration;

(b) where ali the parties to the amalgamation in question were provisionally registered as societies, be a provisional re- gistration; or

(c) where some of the parties to the amalgamation were finally re- gistered and some parties were provisionally registered as so- cieties, be either a final or pro- visional registration, as the registrar may determine.

( It) The provisional or final re- gistration of a society in terms of sub- section (9)(a)(i) and a certificate of provisional or final registration issued to a society in terms of that subsection, shall be deemed to be a provisional or final registration, as the case may be, of such society, and a certificate of pro- visional or final registration, as the case may be, issued, in terms of section 4.

(12) The liquidator of a society which is being wound up voluntarily or by the court, or the judicial manager of a society, may transfer all the assets and liabilities of the society being wound up or under judicial management to another society or a bank: Provided that subsections (5)(b) and (6) shall not apply to a society which is being wound up.

(13) Where a new society regi- stered as a result of an amalgamation of societies or a society or bank which has acquired assets as a result of a transfer of assets and liabilities of a society, pro-

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(a) any mortgage bond or the title deed of any immovable pro- perty registered in his or her office which is transferred to that amalgamated society in accordance with the provisions of subsection (9)(a)(ii) or, as the case may be, to that society or bank in accordance with the provisions of subsection (9)(b)(ii); and

(b) a certificate by the registrar of the registration by him or her of the notice of amalgamation or transfer, as the case may be,

the Registrar of Deeds shall make such endorsements upon such mortgage bond or title deed and effect such entries in his or her registers as are necessary to record the transfer thereof to the amal- gamated society or, as the case may be, the society or the bank taking over the said assets and liabilities.

(14) The amalgamation of socie- ties or the transfer of assets and liabi- lities of a society, in accordance with the provisions of this section, shall not affect the rights of any creditor of any societies involved in the amalgamation or, as the case may be, any creditor of the society transferring assets and lia- bilities in respect of any liability which is included in such transfer, and any such right may be enforced against the amalgamated society or, as the case may be, the society or bank taking over that liability, as if such right had originally accrued against the amalgamated so- ciety or the society or bank receiving transfer.

(15) The provisions of paragraph (b) of subsection (4) shall not be con- strued as preventing the making of reasonable provision out of the profits

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(a) only a member who on the day immediately before the date determined for the transfer of assets and liabilities held shares in the transferor society and

of a society for compensation to its officers (other than directors, alternate directors, local directors or members of local committees) for any resulting loss of office or for payment in recognition of past services rendered by such offi- cers.

(16) In the case of a transfer of assets and liabilities of a society to a bank, provision may, subject to sub- section (18), be made in the relevant transfer agreement for compensation to members of the society, taking into account the unimpaired reserves of the society, by way of either a cash payment or a right to take up shares in the trans- feree bank or its controlling company, and provision may be so made for compensation to officers of the society mutatis mutandis in accordance with the provisions of subsection (15).

(17) The basis on which and con- ditions subject to which compensation contemplated in subsection (16) to members shall take place, and also the amount of the unimpaired reserves of the society on the date of the latest return submitted to the registrar in terms of section 32, and, in the case of cash payments, also the estimated total amount of such payments, shall be fur- nished in the relevant transfer agree- ment.

(18) A resolution to offer com- pensation referred to in subsection (16) to members, shall be approved by both parties to the relevant transfer agree- ment, by separate special resolution, and shall provide that -

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(i) is not resident in Namibia; or

which shares had been issued to such a member at least 12 months before that date, or which had been paid for out of the proceeds of shares re- deemed by that society during that 12 months, shall qualify for such compensation; and

(b) such a member shall neverthe- less not be entitled to the compensation if he or she -

(ii) is a body corporate which is not incorporated in Namibia.

(19) Upon the transfer of assets and liabilities from a society to a bank, all investments in the form of shares issued by the society which have not yet been redeemed before the date of the transfer of its assets and liabilities, and which are included in such transfer, shall be deemed to be fixed deposits with the transferee bank.

(20) The conditions and any tax benefit which immediately before the date of transfer of assets and liabilities were applicable in respect of an invest- ment in the form of shares referred to in subsection (19) shall, notwithstanding the provisions of that subsection, but subject to the provisions of the Income Tax Act, 1981(Act 24 of 1981),continue to apply to the investment for a period of 4 years as from the date of transfer, if it is not redeemed sooner.".

Short title. 3. This Act shall be called the Building Societies Amendment Act, 1994.