Banks Act, 1990 (Act No. 94 of 1990)Chapter IV : Shareholding in, and Registration of Controlling Companies in respect of, Banks42. Restriction of right to control bank |
| (1) | Subject to the provisions of section 37, no person other than a bank or an institution which has been approved by the Authority and which conducts business similar to the business of a bank in a country other than the Republic may exercise control over a bank, unless such person is a public company and is registered as a controlling company in respect of such bank. |
[Section 42(1) substituted by section 33(a) of Act No. 26 of 1994]
| (2) | For the purpose of this Act a person shall be deemed to exercise control over a bank if, in the case where that person is a company, the bank is a subsidiary of that company, or, whether or not that person is a company, if that person alone or together with his or her associates— |
| (a) | holds shares in the bank of which the total nominal value represents more than 50 percent of the nominal value of all the issued shares of the bank, unless, due to limitations on the voting rights attached to the shares so held by the person alone or together with his or her associates, as the case may be, such person voting independently or such person and his or her associates voting as a group, is or are unable to decisively influence the outcome of the voting at a general meeting of the bank; |
| (b) | is entitled to exercise more than 50 percent of the voting rights in respect of the issued shares of that bank; or |
| (c) | is entitled or has the power to determine the appointment of the majority of the directors of that bank, including— |
| (i) | the power to appoint or remove, without the concurrence of any other person, all or the majority of such directors; or |
| (ii) | the power to prevent any person from being appointed a director without his or her consent, |
and if a person’s appointment as a director of the bank follows necessarily from his or her appointment as a director of the person first-mentioned in this subsection, the first-mentioned appointment shall for the purposes of this subsection be deemed to be an appointment by virtue of a power of a person so first-mentioned.
[Section 42(2) substituted by section 29 of Act No. 19 of 2003]
| (3) | For the purposes of this section "associate" means an associate as defined in section 37(7). |
[Section 42(3) substituted by section 33(b) of Act No. 26 of 1994]