COMPANIES (AMENDMENT NO. 2) BILL

Order for Second Reading read.

The Minister for Finance (Mr Hon Sui Sen): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

The Bill seeks to amend section 74 of the Companies Act so as to confer on the Minister the power to exempt certain corporations intending to issue debentures in Singapore from the requirement that they should appoint a trustee corporation as trustee for the debenture-holders. The proposed amendment would allow the Minister the discretion to impose such terms and conditions as he deems fit when granting such exemption.

The definition of a corporation for the purposes of the Companies Act includes any body corporate, whether domiciled in Singapore or abroad. The requirements of section 74 of the Companies Act thus extend to supranational organisations and government-owned companies which may wish to issue debentures in Singapore.

In international bond markets, the normal practice is for the borrower to appoint a fiscal agent rather than a trustee. The fiscal agent would be responsible for the payments of interest and of redemption proceeds to debenture-holders. The more onerous requirement, under section 74 of our Companies Act, of the appointment of a trustee has discouraged a number of reputable borrowers of the highest credit standing from issuing debentures in Singapore.

As a further step in promoting the development of an international bond market in Singapore, I propose to waive the requirement of a trustee in respect of debentures issued in Singapore by reputable borrowers, especially supranational institutions. The proposed amendment to section 74 of the Companies Act would allow me to impose certain conditions before granting such waiver in cases where I do not consider an unconditional waiver justified.

Sir, I beg to move.

Question put, and agreed to.

Bill accordingly read a Second time and Committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill-[Mr Hon Sui Sen].

Bill considered in Committee.

[Mr Speaker in the Chair]

7.23 p.m.

Clause 1 ordered to stand part of the Bill.

Clause 2 -

Mr Hon Sui Sen: Sir, I beg to move,

In page 2, line 6, to leave out "subsection" and insert "section".

The reason is that "section" is really more appropriate because subsections (5A), (5B) and (5C) are referred to.

Amendment agreed to.

Mr Hon Sui Sen: Sir, I beg to move,

In page 2, line 9, after "conditions", to insert "subject".

This amendment is proposed to improve on the language.

Amendment agreed to.

Mr Hon Sui Sen: Sir, I beg to move,

In page 2, lines 11 and 12, to leave out "corporation specified in subsection (5B) of this section" and insert "prescribed corporation".

This amendment is also being proposed to improve on the language.

Amendment agreed to.

Amendment made:

In page 2, line 14, to leave out "subsection" and insert "section".-[Mr Hon Sui Sen].

Clause 2, as amended, ordered to stand part of the Bill.

Bill reported with amendments; read a Third time and passed.