Share Blocks Control Act 1980 (Act No. 59 of 1980)15. Trust account of and investment of trust moneys by share block company |
| (1) | All moneys paid in respect of the amount referred to in section 14 (3) shall forthwith— |
| (a) | be deposited in a separate trust account which the share block company shall open and keep with a bank or building society; or |
| (b) | be entrusted to a practitioner or to an estate agent, in his capacity as such. |
| (2) | If any moneys referred to in subsection (1) are not immediately required for any purpose, those moneys shall, notwithstanding the provisions of that subsection, be invested in a separate savings or other interest-bearing account opened by or on behalf of the company with any bank or building society or any other institution or kind of institution designated by the Minister by regulation with the concurrence of the Minister of Finance. |
| (3) | Any trust, savings or other interest-bearing account referred to in subsection (1) or (2) shall contain a reference to this section. |
| (4) | The amount entrusted to a practitioner or an estate agent in terms of subsection (1) or standing to the credit of the trust account referred to in that subsection or of any savings or other interest-bearing account referred to in subsection (2), of any share block company— |
| (a) | shall, subject to the provisions of section 14 (4), be applied by the company from time to time as and when required, for the sole purpose of the redemption of its loan obligation; |
| (b) | may not be attached by virtue of any writ of execution; |
| (c) | shall, if the company is wound up, be paid to the members of the company in accordance with the provisions of the memorandum or articles of the company or any agreement or arrangement relating to the loan obligation between the company and its members or, in the absence thereof, in the proportion of the share of each member to all the issued shares of the company or, if the company does not have any share capital, in equal amounts. |
| (5) | Without derogating from the provisions of Chapter XI of the Companies Act any share block company shall— |
| (a) | keep in one of the official languages at its registered office such separate accounting records and financial statements as are necessary to account for, and fairly to reflect and explain the state of affairs in respect of, all moneys— |
| (i) | paid in respect of the amount referred to in section 14 (3); |
| (ii) | entrusted to a practitioner or an estate agent or deposited by the company in its trust account referred to in subsection (1) or invested in any savings or other interest-bearing account referred to in subsection (2); |
| (b) | balance its books and records relating to any payment or any account referred to in paragraph (a) at intervals of not more than six months and cause such books and records and the financial statements in respect thereof to be audited at least once annually by the auditor appointed under Chapter X of the Companies Act. |
| (6) | Any auditor who has carried out an audit contemplated in subsection (5) (b), shall within six months from the end of the relevant financial year of the company or within such further period as the Registrar may approve before the expiry of the said period of six months on application in the prescribed form and on payment of the prescribed fee, transmit a report in the prescribed form in respect of his findings to the Registrar and a copy thereof to the company. |
| (7) | Notwithstanding the provisions of subsection (6), the Registrar may at any time order any share block company by notice in writing to submit to him within a period stated in such notice, which shall not be less than thirty days, an audited statement fully setting out the state of affairs of its trust account referred to in subsection (1) or of any savings or other interest-bearing account referred to in subsection (2). |
| (8) | The Registrar may, upon application in writing by any interested party, prohibit any share block company from operating in any way on its trust account referred to in subsection (1) or any savings or other interest-bearing account referred to in subsection (2) and may appoint any person to control and administer such trust, savings or other interest-bearing account, with such rights, duties and powers as the Registrar may deem fit. |
| (9) | Any bank, building society or institution referred to in subsection (2) at which a share block company keeps a trust or savings or other interest-bearing account shall not by reason only of the name or style by which such account is known, be deemed to have knowledge that such share block company is not entitled to all moneys deposited in or credited to any such account. |
| (10) | The provisions of subsection (9) shall not relieve any bank, building society or institution referred to in subsection (2) from any liability or obligation to which, but for the provisions of this Act, it would have been subject. |
| (11) | Notwithstanding the provisions of subsection (9), any bank, building society, or institution referred to in subsection (2) at which a share block company keeps a trust or savings or other interest-bearing account shall not, in respect of any liability of the share block company to such bank, building society or institution, not being a liability arising out of or in connection with such account, have or obtain any recourse or right, whether by way of set-off, counterclaim, charge or other method, in respect of or to moneys standing to the credit of any such account. |
| (12) | This section shall not be construed so as to deprive any bank, building society or institution referred to in subsection (2) of any right existing at the commencement of this Act. |