Section 69: Rehabilitation or reorganisation of financial institution

69. Rehabilitation or reorganisation of financial institution (1) The conservator shall seek authority from the Board to— (a) rehabilitate the financial institution and return it to management; or (b) reorganise the financial institution in accordance with this Part. (2) Where the Board authorises the conservator to proceed to reorganise the financial institution, the conservator shall, after granting a hearing to all interested parties, propose a reorganisation plan and send a copy of it to all depositors and other creditors who shall not receive full payment under the plan. (3) The copy of the reorganisation plan shall be accompanied by a notice stating that where the reorganisation plan is not refused in writing within a period of 30 days by persons holding not less than one third of the aggregate amount of deposits and creditors comprising not less than one third in value of the aggregate of the claims of creditors other than subordinated creditors, the conservator shall, with the approval of the Board, proceed to carry out the reorganisation plan. (4) The approval of a reorganisation plan by the Board shall be subject to its finding that the reorganisation plan shall— (a) be equitable under the circumstances, to depositors, other creditors and shareholders; B3 – 51 [Issue 3] Banking Act (b) provide for bringing in new funds so as to establish adequate ratios between— (i) capital and deposits; (ii) capital and risk assets; (iii) liquid assets and deposits; and (c) provide for the removal of any director, chief executive officer, manager, officer or employee responsible for the circumstances which necessitated the appointment of the conservator. (5) Where in the course of reorganisation it appears that circumstances render the plan inequitable or its execution undesirable, the conservator may recommend to the Board to order the compulsory liquidation of the financial institution in accordance with Part XI. (S. 69 came into operation on 1 June 2007.) PART X – VOLUNTARY LIQUIDATION