Section 31: Acquisition of interest in a financial institution

31. Acquisition of interest in a financial institution (1) No financial institution shall, except as may be approved by the central bank, cause or permit any person to pledge or sell any of his shares which may, directly or indirectly, cause any other person to acquire a significant interest in the financial institution. (2) Any sale or pledge of shares in contravention of subsection (1) shall be invalid, null and void and cause the person to forfeit all rights pertaining to voting or payment of dividends. (3) A person proposing to acquire significant interest under subsection (1) shall give 30 days’ prior notice to the central bank of the acquisition, and such notice shall contain— (a) the name, personal history, business background and experience of each person by whom or on whose behalf the acquisition is to be made and shall be accompanied by a certificate of good conduct in respect of each person from a competent authority or an affidavit duly sworn stating any conviction for a crime and any past or present involvement in a managerial function in a body corporate subject to insolvency proceedings or having declared personal bankruptcy, in respect of each of the persons; (b) a statement of the assets and liabilities of each person by whom or on whose behalf the acquisition is to be made together with a statement of income and cash flow statement; (c) the terms and conditions of the proposal acquisition and the manner in which the acquisition is to be made; (d) the identity, source and amount of the funds or other consideration used or to be used in making the acquisition; (e) any plans or proposals which any acquiring party making the acquisition may have to liquidate the financial institution, to sell its assets or merge it with any company or to make any other major change in its business, corporate structure or management; and [Issue 3] B3 – 26 Revised Laws of Mauritius (f) any additional relevant information that the central bank may require. (4) The central bank shall not approve a proposed acquisition where— (a) the proposed acquisition would give rise to undue influence or would result in a monopoly or substantially lessen competition; (b) the financial condition of any acquiring person might jeopardise the financial stability of the financial institution or prejudice the interests of its depositors; (c) the competence, experience or integrity of any acquiring person, or of any proposed director, chief executive officer or other senior officer, indicates that it would not be in the interest of the depositors of the financial institution or in the interest of the public to permit such person to acquire significant interest in the financial institution; (d) the proposed acquisition will not be conducive to the convenience and needs of the community or market to be served; or (e) any acquiring person fails to furnish the central bank all the information that it requires. (5) Any share of a financial institution held by a person without approval of the central bank in subsection (1) shall be null and void and shall not entitle its holder to any voting rights or payment of dividends. [S. 31 amended by s. 3 (d) of Act 10 of 2010 w.e.f. 24 December 2010.]