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Mutual Banks Act, 1993 (Act No. 124 of 1993)

Chapter VII : Conversion of Mutual Banks

61. Definitions

 

(1) In this Chapter, unless the context otherwise indicates—

 

"applicable date", in relation to a conversion of a mutual bank into a bank, means the date of such conversion or, if any other date is specified in the conversion scheme relating to such conversion as the applicable date for purposes of such conversion, that other date;

 

"conversion into a bank" means a conversion into a public company that is in terms of section 69(1) deemed to be registered as a bank;

 

"conversion scheme" means a scheme regulating the conversion of a mutual bank into a bank and governing the reciprocal rights and obligations of the parties to the conversion, and in particular—

(a) specifying the basis, terms and conditions on which the conversion is effected;
(b) providing for the issue of shares or all the shares in the public company established by the conversion to a public company (if any) registered in the circumstances mentioned in section 66(1) as a controlling company in respect of the bank; and
(c) providing, subject to subsections (2) and (3), for an offer, either to persons who immediately before the applicable date are holders of a qualifying interest in the mutual bank or to such persons and to members of the public, to take up shares—
(i) if no controlling company referred to in paragraph (b) is contemplated, in the public company established by the conversion; or
(ii) if such a controlling company is contemplated, in such controlling company or in both such controlling company and the company to be established by the conversion;

 

"qualifying interest", in relation to a mutual bank that is converted into a bank, means any share in such a mutual bank issued in terms of section 57, to the extent to which such share immediately before the applicable date is paid up in accordance with the conditions attaching to the paying-up of such share, but excludes any share, other than a permanent interest-bearing share, issued by the mutual bank during the 12 months (or such shorter period as may be determined by the mutual bank with the approval of the Registrar) immediately preceding the applicable date to the extent to which that share has not been paid for out of the proceeds of a share in such mutual bank which has been redeemed during the said period.

 

(2) Any person who immediately before the applicable date is the holder of a qualifying interest in the mutual bank which is converted into a bank shall, notwithstanding any provision to the contrary, not be entitled to any shares contemplated in paragraph (c)(i) or (ii) of the definition of "conversion scheme" if he—
(a) is not resident in the Republic; or
(b) is a juristic person that has not been incorporated in the Republic.

 

(3) Shares contemplated in paragraph (c) (i) or (ii) of the definition of "conversion scheme" may be offered to members of the public to the extent only to which they are not taken up by persons holding immediately before the applicable date a qualifying interest in the mutual bank concerned.