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Short title and date of operation.
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1. This Act may be cited as the Development Finance Corporation of Ceylon (Amendment) Act, No. 25 of 1993. The provisions of this Act other than section 7(1) shall come into operation on the date on which this Act becomes an Act of Parliament. The provisions of section 7 (1) shall come into operation on such date as the Minister may appoint by Order published in the Gazette.
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Amendment of section 4 of Chapter 165.
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2. Section 4 of the Development Finance Corporation of Ceylon Act (hereinafter referred to as ” the principal enactment “) is hereby amended by the repeal of paragraph (a) of that subsection, and the substitution, of the following paragraph, therefor :
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” (a) to assist in the promotion, establishment, expansion, carrying on and modernization, of private, industrial, agricultural and commercial enterprises, and”.
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Amendment of section 5 of the principal enactment.
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3. Section 5 of the principal enactment is hereby amended as follows :
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(1) in paragraph (i) of that section, by the substitution, for the words ” form of long term or medium term . loans”, of the words “in the form of loans ” ;
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(2) by the repeal of paragraph (vii) of that section, and the substitution, of the following paragraph therefor:
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” (vii) to provide such services as management, technical, secretarial and administrative advice and merchant bank services, and to assist in obtaining management, technical, secretarial, administrative and merchant bank services, to or for, private, industrial, agricultural and commercial enterprises in Sri Lanka ;” ;
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(3) by the repeal of paragraph (xiii) of that section and the substitution, of the following paragraph therefor:
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” (xiii) subject to such conditions as may be determined by the board of directors, to accept, discount, rediscount, buy, sell and deal in, bills of exchange, promissory notes, coupons, drafts, debentures, certificates, scripts, obligations and other instruments and securities, whether negotiable, transferable or not, of industrial, agricultural or commercial enterprises ;” ;
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(4) by the repeal of paragraph (xv) of that section, and the substitution, of the following paragraph therefor:
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” (xv) to issue bonds and debentures, convertible or otherwise and to accept term deposits from any person in such amounts and on such terms and for such periods as may be determined by the board of directors ; ” ;
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(5) by the renumbering of paragraph (xxii) of that section, as paragraph (xxiii) of that section ; and
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(6) by the insertion immediately after paragraph (xxi) of that section, of the following paragraph:
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” (xxii) to guarantee, deferred payments due from, or the performance of any obligation by, any industrial, agricultural or commercial- enterprises ;”.
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Amendment of Section 7 of the principal enactment
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4. Section 7 of the principal enactment is hereby amended as follows :
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(1) by the repeal of subsection (1) of that section, and by the substitution, of the following subsection therefor: ”
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(1) The authorized capital of the Corporation shall be five thousand million rupees divided into five hundred million ordinary shares of ten rupees each.” ;
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(2) in subsection (2) of that section, by the omission of the words ” to the public “, from that subsection; and
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(3) by the addition, of the end of that section, of the following subsections:
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(3) The Corporation shall not allot any shares under subsection (1) or register any shares
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(a) in the name of any company, incorporated body or an individual, if such allotment or registration would result in such company, incorporated body or individual owning more than fifteen per centum, of the total issued share capital of the Corporation;
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(b) in the name of a company and any one or more of the following :
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(i) any of its subsidiaries ;
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(ii) its holding company ;
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(iii) a subsidiary of its holding company; or
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(iv) a company, in which such company or its subsidiary or its holding company or a subsidiary of its holding company, has a substantial interest,
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if such allotment or registration would result in such company and one or more of the persons referred to in sub-paragraphs (i), (ii), (iii) and (iv) owing, in the aggregate, more than fifteen per centum of the total issued share capital of the Corporation ;
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(c) in the name of an individual and of any one or more of the following :
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(ii) a company in which he has a substantial interest or in which his close relation has a substantial interest ;
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(iii) the subsidiary of a company referred to in sub-paragraph (ii) ;
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(iv) a holding company of a company referred to in sub-paragraph (ii);
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(v) a subsidiary of a holding company of a company referred to in sub-paragraph (ii) ;
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(vi) a company in which a company, referred to in sub-paragraph (ii) or its subsidiary or its holding company or a subsidiary of its holding company has a substantial interest; or
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(vii) an incorporated body other than a company in which such individual or his close relation has a substantial interest,
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if such allotment or registration would result in such individual and one or more of the persons referred to in sub-paragraphs (i), (ii), (iii), (iv), (v), (vi) and (vii) owning, in the aggregate, more than fifteen per centum of the total issued share capital of the Corporation.
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A company or individual shall be deemed to have a substantial interest in a company or incorporated body other than a company within the meaning of this subsection where such company or individual owns more than fifty-one per centum of shares in such company or incorporated body, as the case may be.
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(4) For the purposes of subsection (3)
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” close relation ” in relation to a person, means a parent, spouse, or child of that person or the spouse of a child of that person; ” subsidiary” shall have the same meaning as in the Banking Act, No- 30 of 1988.
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Amendment of section 10 of the principal enactment.
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5. Section 10 of the principal- enactment is hereby amended as follows :
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(1)by the repeal of subsection (3) of that section ;
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(2) by the renumbering subsections (4), (5), (6) and (7) of that section, as subsections (3), (4), (5) and (6) respectively, of that section ;
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(3) in the renumbered subsection (4) of that section
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(a) by the substitution for the words ” elected under subsection (6) “, of the words ” elected under subsection (5) ” ; and
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(b) by the omission of the words “No shareholder-director shall hold office for a continuous period of more than eight years “, from that subsection;
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(4) in the renumbered subsection (5) of that section, by the substitution for the words “Member of Parliament or a member of a local authority,”, of the words ” Member of Parliament or a member of a Provincial Council or a local authority,”; and
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(5) in the renumbered subsection (6) of that section, by the omission of the words ” such election shall not take effect unless approved .by the Minister in charge of the subjects of Finance and Planning” from that subsection.
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Repeal of section 10A of the principal enactment
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6. Section 10A of the principal enactment is hereby repealed.
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Amendment of section 14 of the principal . enactment.
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7. Section 14 of the principal enactment is hereby amended by the repeal of subsection (9) of that section.
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Insertion of new sections 14A and 14B in the principal enactment.
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8. The following new sections are inserted immediately after section 14 and shall have effect as sections 14A and 14B of the principal enactment:
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Development Finance Corporation Debentures and Stock.
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14A.
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(1) The board of directors may create and issue debentures and stock, and the debentures and stock so created and issued shall in this Act be referred to as ” Development Finance Corporation of Ceylon Debentures” and ” Development Finance Corporation of Ceylon Stock”, respectively.
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(2) ” Development Finance Corporation of Ceylon Debentures” and ” Development Finance Corporation of Ceylon Stock” shall be issued, transferred, dealt with, redeemed and cancelled, in accordance with such terms and conditions as may be determined by the board of directors.
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(3) The Government may guarantee the repayment of the principal sum, and the payment of the interest on any Development Finance Corporation of Ceylon Debentures, and on any Development Finance Corporation of Ceylon Stock, related and issued by the board of directors.
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(4) Any sum required for the fulfillment of any guarantee provided under subsection (3) shall be paid out of the Consolidated Fund.
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Accounts &c to be laid before Parliament.
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14B. The Minister in charge of the subject of Finance shall as soon as possible after the end of each financial year, cause to be laid before Parliament, the report on the statement of accounts of the Corporation and a statement of
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(a) every loan raised by the Corporation from the International Bank for Reconstruction and Development or from any other international or foreign organisations approved by the Government; and
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(b) every guarantee given by the Government, under section 14 or 14A, during the course of that financial year.’.
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Amendment of section 16 of the principal enactment.
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9. Section 16 of the principal enactment is hereby amended as follows :
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(1) in subsection (1) of that section, by the substitution, for the words ” by two qualified auditors “, of the words ” by a qualified auditor ” ;
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(2) in subsection (2) of that section, by the substitution, for the words “the auditors of the Corporation.”, of the words ” the auditor of the Corporation.” ;
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(3) in subsection (3) of that section, by the substitution, for the words “Each auditor of the Corporation” of the words ” The auditor of the Corporation “;
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(4) in subsection (4) of that section, by the substitution, for the words “Each auditor of the Corporation”, of the words ” The auditor of the Corporation ” ;
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(5) in subsection (5) of that section, by the substitution
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(a) for the words ” Each Auditor of the Corporation”, “of the words “The auditor of the Corporation “; and
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(b) for the words “a true and correct view”, of the words ” a true and fair view “;
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(6) in subsection (6) of that section, by the substitution, for the words ” the report of each auditor ” of the words ” the report of the auditor “;
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(7) in subsection (7) of that section, by the substitution, for the words ” each auditor of the Corporation”, of the words ” the auditor of the Corporation “; and
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(8) by the addition, at the end of that section of the following subsection:
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(8) In this section, ” qualified auditor ” means
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(a) an individual who being a member of the Institute of Chartered Accountants of Sri Lanka or any other institute established by law, possesses a certificate to practice as an accountant issued by the Council of such Institute ; or
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(b) a firm of accountants, each of the resident partners of which, being a member of the Institute of Chartered Accountant of Sri Lanka or any other Institute established by law, possesses a certificate to practice as an accountant issued by the Council of such Institute.
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Insertion of new section 16A and 16B in the principal enactment.
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10. The following new sections are hereby inserted immediately after section 16, and shall have effect as sections 16A and 16B respectively, of the principal enactment:
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” Corporation deemed to be a bank within the meaning of the Evidence Ordinance.
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16A. The Corporation shall be deemed to be a bank within the meaning of Chapter VI of the Evidence Ordinance, notwithstanding the fact that it does not accept demand deposits, and accordingly, the provisions of that Chapter shall apply to, and in relation to, the Corporation.
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Offences.
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16B.
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(1) Every person who
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(a) knowingly allots, or registers, any shares in the Corporation, to or in the name of, any person, in contravention of the provisions of section 7(3); or
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(b) knowingly secures the allotment or registration of any shares in the Corporation, to, or in the name of, any person, in contravention of the provisions of section 7(3) ; or
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(c) being a director, employee or auditor of the Corporation, discloses any matter relating to a transaction of the Corporation to any person for any purpose other than a purpose for which he is authorised to disclose such matter by this Act,
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shall be guilty of an offence under this Act and shall upon conviction after summary trial before a Magistrate, be liable to fine not exceeding five thousand rupees or to imprisonment of either description for a term not exceeding one year, or to both such fine and imprisonment.
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(2) Where an offence under this Act is committed by a body of persons, then,
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(a) if that body of persons is a body corporate, every director and officer of that body corporate ; or
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(b) if that body of persons is a firm, every partner of that firm, shall be deemed to be guilty of that offence :
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Provided, however, that a director or officer of such body corporate, or a partner of such firm, shall not be deemed to be guilty of such offence if he proves that such offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence.
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Amendment of section 18 of the principal enactment.
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11. Section 18 of the principal enactment is hereby amended as follows:
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(a) by the insertion, immediately after the definition of “industrial enterprise”, of the following definition:
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“loan” includes any form, of financial accommodation, howsoever described;’ and
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(b) by the insertion immediately after the definition of “local authority”, of the (following definition:
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” Provincial Council “means a Provincial Council established by Chapter XVIIA of the Constitution;’,
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Sinhala text to prevail in case of inconsistency.
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12. In the event of any inconsistency between the Sinhala and Tamil texts of this Act, the Sinhala text shall prevail.
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