Section 32A: Transfer of undertaking by bank

32A. Transfer of undertaking by bank (1) Subject to subsection (11), where, for the purpose of restructuring its business or for such other purpose as the central bank may approve, a bank proposes to transfer the whole or part of its undertaking to— (a) its parent; B3 – 27 [Issue 7] Banking Act (b) its wholly owned subsidiary; (c) a wholly owned subsidiary of its parent; or (d) another financial institution or a specialised financial institution, it shall apply, in such form and manner as the central bank may determine, to the central bank for approval and pay such non-refundable processing fee as the central bank may, with the approval of the Minister, determine. (2) Notwithstanding subsection (1), the central bank may require a bank to restructure its business in the manner referred to in subsection (1). (3) The central bank shall not give its approval pursuant to subsection (1) or require a bank to restructure its business pursuant to subsection (2), unless it is of the opinion that that it is expedient to do so, having regard to— (a) its objects and functions under sections 4 and 5 of the Bank of Mauritius Act; (b) any systemic risk that the bank may pose; (c) any incidence which the bank may have on the stability of the financial system of Mauritius; (d) the need to further protect the bank’s depositors and the public. (4) A bank shall— (a) on making an application under subsection (1), submit to the central bank, in such form as the central bank may determine, a provisional list of its assets and liabilities updated as at the day immediately preceding the date of the application; or (b) on being required by the central bank to restructure its business under subsection (2), submit, in such form as the central bank may determine and within such time as the central bank may specify, a provisional list of its assets and liabilities updated as at the day immediately preceding the date of the submission. (5) Where the central bank gives its approval for a transfer of the whole or part of the undertaking of a bank or requires the restructuring of a bank under this section— (a) the central bank shall require the transferor bank to effect the transfer of the undertaking in accordance with such terms and conditions as the central bank may determine; (b) the transferor bank shall comply with such other regulatory requirements relating to any part of its business under any enactment and shall submit to the central bank written confirmation of such compliance; (c) (i) the transferor bank shall, within 14 days of the approval or requirement, give written notice to each of its shareholders informing him of his right to require the transferor bank to purchase his shares in lieu of being allotted shares in the transferee bank; and (ii) where a shareholder intends to exercise his right under subparagraph (i), he shall, within 28 days of the date of the notice referred to in that subparagraph, require the transferor bank to purchase such shares in the manner set out in [Issue 7] B3 – 28 Revised Laws of Mauritius section 110 of the Companies Act, provided that reference in section 110 of the Companies Act to— (A) section 109 (2) (a) of the Companies Act shall be construed as reference to this subparagraph; (B) the 7-day period under section 110 (1) of the Companies Act shall be construed as if that 7-day period were to run from the expiry of the 28-day period under this subparagraph; and (C) the Board of directors, the Board or the company under sect set out in [Issue 7] B3 – 28 Revised Laws of Mauritius section 110 of the Companies Act, provided that reference in section 110 of the Companies Act to— (A) section 109 (2) (a) of the Companies Act shall be construed as reference to this subparagraph; (B) the 7-day period under section 110 (1) of the Companies Act shall be construed as if that 7-day period were to run from the expiry of the 28-day period under this subparagraph; and (C) the Board of directors, the Board or the company under section 110 of the Companies Act shall be construed as reference to the transferor bank. (5A) The central bank may exempt a transferor bank from complying with subsection (5) (c) where the central bank is of the view that such compliance may lead to the impairment of the capital and capital adequacy ratio of the transferor bank, provided that the transferor bank gives an undertaking to the central bank that it shall give written notice to its shareholders of the proposed transfer of its business or the restructuring of the bank and inform them of their right to sell their shares at any time on the market. (6) Where the central bank is satisfied that the transferor bank has complied with the terms and conditions referred to in subsection (5) (a) and the applicable requirements of this section, the central bank shall— (a) authorise the transfer of the undertaking of the transferor bank; (b) give public notice of the transfer of the undertaking of the transferor bank and notice thereof in at least 3 daily newspapers, specifying the appointed day as the date on which the transfer shall become effective; and (c) notify the Registrar of Companies and the transferor bank accordingly. (7) Where the central bank authorises the transfer of the undertaking under subsection (6)— (a) the undertaking of the transferor bank shall, on the appointed day, be transferred to the transferee bank in accordance with this section and the terms and conditions specified in the Third Schedule; (b) the Registrar of Companies shall issue a Certificate of Transfer of Undertaking under section 346A of the Companies Act. (8) The transferee bank shall, within 8 days of the appointed day, submit the Certificate of Transfer of Undertaking, together with a final list of the assets and liabilities of the transferor bank updated as at the day immediately preceding the appointed day, to the Registrar-General for registration and transcription, and provide a certified copy thereof to the Conservator of Mortgages. B3– 28 (1) [Issue 9] Banking Act (9) The Certificate of Transfer of Undertaking shall be evidence of the transfer to and vesting in the transferee bank of the undertaking. (10) Notwithstanding any other enactment or anything specified in any contract or agreement, nothing in or authorised by this section shall— (a) invalidate or discharge any contract or agreement which had been entered into before the transfer of the undertaking; (b) constitute a breach of, or default under, or require compliance with any notice or consent provision, including express or implied consent for transfer; (c) require any obligation to be performed sooner or later than would have otherwise been the case under any contract or instrument to which the transferor bank is a party or by which it is bound; (d) allow any party to any contract to which the transferor bank is a party, or by which it is bound, to terminate that contract where that party would not otherwise have been able to terminate that contrac pliance with any notice or consent provision, including express or implied consent for transfer; (c) require any obligation to be performed sooner or later than would have otherwise been the case under any contract or instrument to which the transferor bank is a party or by which it is bound; (d) allow any party to any contract to which the transferor bank is a party, or by which it is bound, to terminate that contract where that party would not otherwise have been able to terminate that contract or to treat any interest or right under that contract as terminated; (e) entitle any party to any contract to which the transferor bank is a party, or by which it is bound, to modify the terms of that contract where that party would not otherwise have been able to modify those terms or confer a right, interest or benefit on that party which it would not otherwise have had; (f) release any surety wholly or in part from all or any liability under or in respect of any contract which had been entered into before the transfer of the undertaking; (g) otherwise, in relation to the transferred undertaking, place the transferee bank in a position which is less favourable than the position in which the transferor bank would have been if this section were not in operation; or (h) result in a change in the ranking of any security interest forming part of the transferred undertaking. (11) Nothing in this section shall preclude a bank, other than a bank having made an application under subsection (1) or having been required to restructure its business under subsection (2), from initiating such action for the transfer or restructuring of its business as it considers appropriate otherwise than under this section, provided that the approval of the central bank is obtained for the restructuring. (12) In the event of conflict or inconsistency between this section and the Companies Act or any other enactment, this section shall, to the extent of any such conflict or inconsistency, prevail. (13) The Minister may make regulations to provide for any matter necessary or consequential to the implementation of this section and the Third Schedule. [Issue 9] B3 – 28 (2) Revised Laws of Mauritius (14) In this section and the Third Schedule— “appointed day” means the date on which a transfer of undertaking becomes effective, as specified in the notices under subsection (6); “assets” means the property, rights, powers, interests and privileges of any description of the transferor bank and includes but shall not be limited to— (a) rights, powers, interests and privileges that are— (i) of a personal character (intuitu personae); (ii) not lawfully capable of being assigned or performed vicariously; (iii) expressly stated under any agreement creating them to be incapable of being assigned or performed vicariously; or (iv) held by the transferor bank as trustee; (b) any shares or interests held by the transferor bank in another entity; and (c) rights, powers, interests and privileges existing or arising pursuant to a foreign law, including a contract governed by that foreign law; “Certificate of Transfer of Undertaking” means a certificate issued under section 346A of the Companies Act, as referred to in subsection (7) (b); “interests” includes— (a) security interests of any description of the transferor bank, whether secured or unsecured; (b) security interests witnessed in pari passu, cession de priorité, security sharing and similar agreements; “liabilities” means obligations ing or arising pursuant to a foreign law, including a contract governed by that foreign law; “Certificate of Transfer of Undertaking” means a certificate issued under section 346A of the Companies Act, as referred to in subsection (7) (b); “interests” includes— (a) security interests of any description of the transferor bank, whether secured or unsecured; (b) security interests witnessed in pari passu, cession de priorité, security sharing and similar agreements; “liabilities” means obligations and commitments of the transferor bank and includes but shall not be limited to— (a) obligations or commitments that are— (i) of a personal character (intuitu personae); or (ii) not lawfully capable of being assigned or performed vicariously; (iii) expressly stated under any agreement creating them to be incapable of being assigned or performed vicariously; or (iv) incumbent on the transferor bank as trustee; (b) obligations existing or arising pursuant to a foreign law, including a contract governed by that foreign law; and (c) customer deposit accounts; “parent” has the same meaning as in the Companies Act; B3– 28 (3) [Issue 9] Banking Act “Registrar of Companies” means the Registrar of Companies appointed under the Companies Act; “transferee bank” includes the parent, wholly owned subsidiary or wholly owned subsidiary of the parent of the bank, the financial institution or specialised financial institution to which a transfer of undertaking is being or has been effected under this section; “transferor bank”— (a) means a bank which is authorised by the central bank to transfer its undertaking under this section; (b) includes a bank which has applied for approval for, or is required by the central bank to effect, a transfer of undertaking under this section; “undertaking” includes the whole or part of any business, including a branch. [S. 32A inserted by s. 3 of Act 1 of 2013 w.e.f. 18 April 2013; amended by s. 3 (i) of Act 27 of 2013 w.e.f. 21 December 2013; s. 4 (h) of Act 9 of 2015 w.e.f. 14 May 2015; s. 3 (i) of Act 18 of 2016 w.e.f. 7 September 2016.] PART V – FINANCIAL STATEMENTS, AUDIT AND SUPERVISION