PART 3 | LICENSING OF CHIT FUND COMPANIES |
4.—(1) No chit fund business may be transacted in Singapore except by a public company which is in possession of a valid licence granted under this Act by the Authority with the approval of the Minister authorising it to conduct chit fund business in accordance with the provisions of this Act.| (2) Any person who contravenes subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $5,000 or to imprisonment for a term not exceeding 3 years or to both and, in the case of a continuing offence, to a further fine of $1,000 for every day during which the offence continues after conviction. |
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| Use of words “chit” and “chit fund” |
5.—(1) No person or body of persons, whether incorporated or not, other than a chit fund company licensed under this Act may, without the Authority’s written consent —| (a) | use the word “chit” or the words “chit fund” or any of its or their derivatives in any language, or any other word indicating that it transacts chit fund business, in the name, description or title under which that person or body of persons is transacting business in Singapore; or | | (b) | make or continue to make any representation to that effect in any bill head, letter paper, notice, advertisement or in any other manner whatsoever. |
| (2) For the purposes of subsection (1), the words “HWEI”, “KUTU” and “TONTINE” or any other word in any other language having the same meaning or being to the like intent are deemed to be derivatives of the word “chit”. |
| (3) Nothing in this section prohibits an association of chit fund companies formed for the protection of common interests from using the word “chit” or the words “chit fund” or any of its or their derivatives in any language as a part of its name or description of its activities. |
| (4) Any person who contravenes subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $1,000 or to imprisonment for a term not exceeding one year or to both and, in the case of a continuing offence, to a further fine not exceeding $100 for every day during which the offence continues after conviction. |
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| Examination of persons suspected of transacting chit fund business |
| 6. Whenever the Authority has reason to believe that a person is transacting chit fund business without a licence, the Authority has the power to examine the books, accounts and records of the person in order to ascertain whether or not the person has violated or is violating any provisions of this Act, and any refusal to submit those books, accounts and records is prima facie evidence of the fact of operation without a licence. |
7.—(1) A public company which desires authority to carry on chit fund business in Singapore must apply in writing to the Authority for a licence under this section and must supply —| (a) | a copy of the memorandum of association and articles of association or other instrument under which the company is incorporated, duly verified by a statutory declaration made by a senior officer of the company; | | (b) | a copy of the latest balance sheet of the company; and | | (c) | any other information that may be called for by the Authority. |
(2) In considering any application by a public company for a licence, the Authority may require to be satisfied as to —| (a) | the financial character of the company; | | (b) | the character of the management of the company; | | (c) | the adequacy of the capital structure of the company and earning prospects of the company; | | (d) | the objects of the company as disclosed in its memorandum of association; | | (e) | the convenience and needs of the community to be served; and | | (f) | whether the public interest will be served by the granting of a licence. |
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| (3) The Authority may, with the approval of the Minister, grant a licence, with or without conditions, or refuse to grant a licence. |
| (4) The Authority may at any time vary or revoke any existing conditions of a licence or impose conditions or additional conditions thereto. |
| (5) Where a licence is subject to conditions, the chit fund company must comply with those conditions. |
| (6) Any chit fund company which fails to comply with any of the conditions of its licence shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $5,000 and, in the case of a continuing offence, to a further fine of $1,000 for every day during which the offence continues after conviction. |
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8.—(1) Every chit fund company in Singapore must pay the annual licence fee that the Authority may by notification in the Gazette prescribe.| (2) The Authority may prescribe different licence fees in respect of different classes or categories of chit fund companies and those fees apply uniformly to those classes or categories. |
| (3) The manner of payment of the licence fee is as specified by the Authority. |
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| Minimum capital requirements |
9.—(1) Subject to the provisions of this Act, no chit fund company may be granted or may hold a licence unless its capital, issued and paid up in cash, and unimpaired by losses or otherwise, is not less than $200,000.| (2) The Authority may require such percentage of the issued and paid‑up capital as may be prescribed in regulations made under this Act to be deposited in such manner as may be prescribed. |
| (3) A chit fund company incorporated in Singapore must not reduce its paid‑up capital during the currency of its licence without the Authority’s approval. |
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| Restriction of opening of branches of chit fund companies |
10.—(1) A chit fund company must not open a new place of business or change the location of an existing place of business in Singapore without submitting a written application in respect thereof to the Authority.(2) Upon receipt of an application under subsection (1), the Authority may —| (a) | give its approval; or | | (b) | without assigning any reason, refuse to give its approval, |
| and its decision is final. |
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| (3) A chit fund company incorporated in Singapore must not open a new branch, agency or office in any place outside Singapore. |
| (4) Any chit fund company which contravenes subsection (1) or (3) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $500 and, in the case of a continuing offence, to a further fine of $100 for every day during which the offence continues after conviction. |
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| Fees to be paid in respect of branches of chit fund companies |
11.—(1) The Authority may by notification in the Gazette specify the annual licence fees that chit fund companies in Singapore must pay for each of their branches.| (2) The manner of payment must be as specified by the Authority. |
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| Limitation on mergers, etc., of chit fund company |
12.—(1) No chit fund company incorporated in Singapore may be merged or consolidated with or be taken over by another company or companies or their subsidiaries or related companies as described in section 6 of the Companies Act 1967 (whether that company is or those companies are incorporated in Singapore or outside Singapore) nor may any such company or companies acquire an interest exceeding 20% of the voting share capital of a chit fund company without application to, and approval by, the Authority. | (2) In considering the application, the Authority has power to call for any information that it requires. |
(3) The Authority may —| (a) | approve the application; or | | (b) | refuse the application. |
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| (4) Any chit fund company whose application has been refused by the Authority may within one month of being notified of the refusal by the Authority appeal against its refusal to the Minister whose decision is final. |
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| Amendment of constitution of chit fund company |
13.—(1) Every chit fund company in Singapore must, prior to the making of any amendment or alteration in its memorandum of association or articles of association, or other instrument under which it is incorporated, furnish to the Authority for its approval particulars in writing (verified by a statutory declaration made by a senior officer of the chit fund company) of the proposed amendment or alteration.(2) The Authority may thereupon —| (a) | approve the proposed alteration without modification; | | (b) | approve the proposed alteration with modification; or | | (c) | refuse to approve the proposed alteration. |
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| (3) If the Authority approves the proposed alteration with modification, the chit fund company must adopt the proposed alteration as so modified or not proceed with the proposed alteration, and if the Authority refuses to approve the proposed alteration, it may request the chit fund company to withdraw the proposed alteration and the chit fund company must comply with the Authority’s request. |
| (4) Any chit fund company which fails to comply with the requirements of subsection (1) or with any request by the Authority made under subsection (3) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $300 for every day during which the default continues after conviction. |
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14.—(1) The Authority may by order revoke a licence issued under this Act —| (a) | if it is satisfied that the chit fund company holding that licence —| (i) | has ceased to transact chit fund business in Singapore or is carrying on any other business other than chit fund business; | | (ii) | proposes to make, or has made, any composition or arrangement with its creditors or has gone into liquidation or has been wound up, whether voluntary or involuntary, or otherwise dissolved; | | (iii) | is carrying on its business in a manner likely to be detrimental to the interests of the subscribers of its chit funds or has insufficient assets to cover its liabilities to its subscribers or the public; | | (iv) | is contravening the provisions of this Act or the regulations made under this Act; or | | (v) | has been convicted of any offence under this Act or the regulations made under this Act or if any of its officers holding a managerial or executive position has been convicted of any offence under this Act or the regulations made under this Act; or |
| | (b) | if it considers it in the public interest to do so. |
| (2) The Authority must, before revoking any licence under subsection (1), give the chit fund company concerned notice in writing of its intention to do so, specifying a date, not less than 21 days after the date of the notice, upon which the revocation will take effect and calling upon the chit fund company to show cause to the Authority why the licence should not be revoked. |
| (3) When the Authority has revoked a licence under subsection (1), it must forthwith inform the chit fund company by written notice of the revocation. |
| (4) The chit fund company may, within 14 days of the receipt of the notice referred to in subsection (3), or an extended period of time that the Minister may allow, appeal in writing against the revocation to the Minister whose decision is final. |
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| Effect of revocation of licence |
15.—(1) Where an order of revocation becomes effective under section 14 —| (a) | notice of the revocation must be published in the Gazette; and | | (b) | the chit fund company must, as from the date of the notice, cease to transact any chit fund business in Singapore except as may be approved by the Authority for the purpose of winding up its chit fund business. |
| (2) Subsection (1)(b) does not prejudice the enforcement by any person of any right or claim against the chit fund company or by the chit fund company of any right or claim against any person. |
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| 16. Any licence issued under section 7(3), or a certified copy of the licence, must, so long as it remains valid, be exhibited in a conspicuous position at the principal place of business of the chit fund company and in the event of its revocation under section 14, the licence and all certified copies of the licence must be surrendered forthwith to the Authority. |
| Publication of list of companies |
| 17. The Authority must cause to be published in the Gazette in the month of April in each year a list of all chit fund companies to which licences have been issued under this Act. |
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