Finance Companies

(1) Subject to the provisions of section 3, no finance business shall be carried on except by a public company which

(2) Every application for registration under this Act by a company shall be made to the Board in the prescribed form, and shall contain a declaration by the applicant that the particulars stated in the application are, to the knowledge and belief of the applicant, true and accurate,

(3) Every person who makes any declaration, or furnishes any information under subsection (2), knowing the same to be false, shall be guilty of an offence under this Act,

(4) Where an application Is made to the Board for registration under this Act, the Board may call for and examine or cause to be examined, the books, records and documents of the company applying for registration.

(5) The Board may, on considering an application made to it by a company for registration under the Act, register such company as a finance company if it is satisfied that

(6) Where a company is not registered under subsection (5), or a person or a body of persons to whom section 3 is applicable, has failed to comply with the provisions of that section, the Board may issue to such company, a person or body of persons as the case may be directions for winding up or for divesting the finance business carried on by it and for the settlement of its deposit liabilities and it shall be the duty of such company or person or body of persons to comply with such direction.

(7) Where a company or person or a body of persons fails to comply with directions issued under subsection (7) within one month of the issue of such directions, the Board may require the Director to take such action as may be necessary, to secure compliance therewith including filing action for winding up in which event the provisions of section 18 shall apply.

(1) Notwithstanding the provisions of section 2. a company or a person or a body of persons carrying on finance business on the day preceding the date of commencement of this Act

(2) Every company or person or body of persons referred to in subsection (1) shall, on compliance with the provisions of paragraph (b) of subsection (1) submit to the Monetary Board evidence in proof of such compliance. A company or body of persons complying with such provisions to the satisfaction of the Board, may apply for registration under section 2.

(3) Where a company or a person or a body of persons carries on finance business under subsection (1), the provisions of this Act shall in so far as they are applicable and subject to the other provisions of this Act, apply to such, company or person or a body of persons.

(1) A finance company shall, at all times maintain an unimpaired capital of not loss than five million rupees.

(2) A finance company shall not reduce or impair its capital or statutory reserves without the prior written approval of the Board. In this subsection, ” statutory reserves” means any reserve fund maintained by the company in pursuance of a direction issued to it under this Act,

(1) Where a finance company has been registered under this Act, the Board shall issue to such finance company a licence in the prescribed form permitting such company to carry on finance business.

(2) Such licence shall be exhibited at all times in the principal office or place of business of such finance company.

(3) Every finance company registered under the Act, shall pay an annual licence fee of the prescribed amount to the Board.

(1) Where any finance company registered under this Act has ceased to carry on finance business, a notice of such cessation shall be given to the Board forthwith upon such cessation, by such company.

(2) On receipt of notice of cessation under subsection (1), the Board shall -remove the name of the finance company from the register maintained under section 8 and cancel its licence, and may issue to such finance company directions for winding up or for divesting the finance business of the finance company and for the settlement in such manner as may be specified, of the deposit liabilities of the finance company,

(3) Where the Board has reasonable grounds to believe that any finance company registered under this Act is not carrying on finance business, the Board may sand to such company, a notice by registered post requiring such-company to furnish proof, within two weeks from the date of such notice, that it has not ceased to carry on finance-business. Where such finance company fails to furnish such proof within such period, the Board shall remove the name of such finance company from the register maintained under section 6 and shall cancel its licence. Where the registration of a finance company is so cancelled, the Board may issue such directions as it deems necessary, including directions for winding up or require the Director to apply for winding up of the company, in which event, the provisions of section 18 shall apply.

(4) Where a finance company fails to comply with directions issued under subsection (2) within one month of the issue of such directions, the Board may require the Director to file action for winding up the finance company and the provisions of section 13 shall apply to such winding up-

(1) Notwithstanding the provisions of any other law. the Board may give directions to finance companies or to any group or category of finance companies regarding the manner in which any aspect of the business of such companies are to be conducted and in particular

(2) The maximum rates of interest fixed by any direction under paragraphs (a) and (b) of subsection (1) shall, if so determined by the Board, apply in respect of any deposit accepted or in respect of any loan, credit facility or any other financial accommodation granted, before the date of such direction:

Provided, however, that nothing in any such direction shall

(3) For the purposes of this Act, the Board may give directions where necessary to any finance company in particular on such matters as are specified in subsection Provided, however, that a competent court may, on any application made to it in that behalf by a finance company at any while any direction is in force, make a declaration permitting that company to carry on its business without being subject to such direction, or may vary or alter such direction in such a manner as the court may determine, and any declaration by the court as aforesaid shall have effect notwithstanding anything to the contrary in the direction made by the Board

(4) The Monetary Board may in its discretion pay interest on any cash balance maintained by a” finance company in the Central Bank of Sri Lanka, in pursuance of a direction, issued to it under paragraph (j) ,at such rate as may be determined by the Board.

(1) Where the Board on a report made by the Director is of the opinion that a finance company

(2) Any finance company dissatisfied with an order given under subsection (1). may, before the expiry of thirty days from the date of the issue of such order, appeal in writing to the Board and the Board shall reader its decision within fifteen days of receipt of such appeal.

(1) The Director or any officer authorized by him may require any person or a body of persons to furnish him with such information as he may consider necessary to ascertain whether such person or body of persons is carrying on finance business, and for this purpose, may require the production of, and examine any books or records relating to such person or body of persons, and if he is of the, opinion that such person or body of persons Is carrying on finance business, report such fact to the Board-

(2) If the Board, on consideration of a report under subsection (1), determines that a person, or body, of persons is carrying on finance business, it shall require such person or body of persons to comply with the requirement of the Act within a specified period of time, and where it fails to do so, shall have the power to give directions and take such steps as it considers necessary to safeguard depositors, including the power to wind up persons or a body of persons, in which event the provisions of section 18 shall, mutatis mutandis, apply.

(3) Any person or body of persons required to furnish information or to produce any books or records under subsection (1) shall furnish such information or produce such books, or records, documents to an officer authorized by the Director and shall comply with any directions or requirements made under subsection (2).

(4) Without prejudice to the generality of subsection (1), the Board may require any person or a body of persons to furnish information as may be necessary to ascertain whether any sum of money accepted, borrowed or solicited by such person or body of persons is a deposit,

(1) The Director may, at any time, examine or authorize any officer of his department to examine, the books and accounts of any finance company.

(2) The report on any such examination shall be furnished to the Governor of the Central Bank of Sri Lanka by the Director as soon as such examination is completed. The Director may recover the costs of such examination from the finance company.

(3) It shall be lawful for the Director or any officer authorized by him

(4) It shall be the duty of every director, manager, secretary, employee or any auditor of any finance company to comply with any requirement imposed on him under this section and to afford to the Director or to any officer authorized by him, or to any auditor authorized by him under paragraph (d) of subsection (3), access to all books and records of that finance company including its cash balances, assets and liabilities whenever requested to do so by the Director.

(5) The Director may, where he considers it necessary to ascertain the true condition of the affairs of a finance company and to ascertain whether such finance company is carrying on business in a manner detrimental to its present or future depositors, by notice in writing require any person whom he considers to have information relating to the finance company, to furnish such information to him. or to any officer authorized by him or to any auditor authorized by him under paragraph (d) of subsection (3) or to attend in person before him or any officer authorized by him, at such place and at such date and time as may be specified in such notice, so that the person may be examined on. such matters as may be specified in such notice.

(6) For the purpose of ascertaining the true condition of the affairs of the finance company, the Director may if he thinks it necessary for the purposes of an examination under subsection (5), also examine the business of any company which is or has at any relevant time been

(a) a balance sheet as at the last working day of each financial year; and

(b) a profit and loss account in respect of such year.

(1) The balance sheet of a finance company shall set out the state of affairs of such company as at the end of the financial year to which such balance sheet relates.

(2) There shall be shown in the balance sheet or in any statement annexed thereto

(a) the amount charged to revenue by way of provision for depreciation, renewals or diminution in value of fixed assets;

(b) the amount charged to revenue for Sri Lanka income-tax and other Sri Lanka taxation on profits and distinguishable from such accounts, the amounts and materials, set aside, or proposed to be set aside, for liabilities in respect of tax due in the current year of taxation or a succeeding year;

(c) the aggregate amount of dividends paid or proposed to be paid;

(d) the amount of remuneration of auditors;

(e) the amount charged to revenue representing the aggregate amount of the emoluments of directors;

(f) the amount set aside or proposed to be set aside to, or withdrawn from reserves;

(g) under separate headings, the profit or loss or the income and expenses arising from transactions such as are not usually carried on by the finance company and are carried on owing to circumstances of an exceptional or no recurrent nature or by a change in the basis of accounting;

(h) except in the case of the first profit and less account after the date of commencement of this Act, the corresponding amount at the end of the immediately preceding financial year for all items shown in the profit and loss account,

(1) Every finance company shall transmit to the Director and publish within six months after the close of the financial year

(2) Every finance company shall exhibit the balance sheet and profit and loss account of such company in a conspicuous part of each of its places of business until the balance sheet and profit and loss account for the succeeding financial year are prepared and exhibited.

(3) The Board may specify the form of the balance sheet and profit and loss account referred to in this section and where each form is specified, the balance sheet and profit and loss account of every finance company shall be pre pared in such form as is specified.

(a) whether the conduct of the affairs of the finance company has been in accordance with the law, rules and directions issued by the Board;

(b) whether records relating to the acceptance of deposited and maintaining of accounts are Satisfactory;

(c) whether the accounting systems, procedures, books, records and other documents have been properly and adequately designed from, the point of view of financial control purposes and from the point of view of the presentation of information to enable a continuous evaluation of the activities of the finance company and whether such systems, procedures, books, records and other documents are in effective operation;

(d) whether the accounts audited have been so designed as to present a true and fair view of the affairs of the finance company in respect of the period under consideration due regard being had to principles of accountancy; financing and valuation,

(1) In any case where the Director is satisfied after examination by himself or by any officer authorized by him, of the affairs of any finance company, or upon information received from the company, that it is insolvent or is likely to become unable to meet the demands of its depositors or that its continuance in business is likely to involve loss to its depositors or creditors, the Director shall make a report accordingly to the Governor of the Central Bank of Sri Lanka for submission to the Board ; and if the Board, upon review of the fats and circumstances, is of opinion that action should be taken as hereinafter provided, the Board may make an order directing the company forthwith to suspend business and directing the Director to take charge of all books, records and assets of the company, and to take such measures as may be necessary to prevent the continuation, of business by the company.

(2) Any director, manager, secretary or employee of a finance company or any other person having in his possession or custody any books, records or assets of the company, who falls to hand over the same to the Director or to an officer authorized by him, or any person who obstructs or resists the Director or an officer authorized by him from taking charge of any books, records or assets of the company or from taking such other measures as the Director may consider necessary to prevent the continuation of business by the company shall be guilty of an offence under the Act,

(3) Notwithstanding anything in any other law, no action or proceeding may be instituted in any court for the purpose of securing the review or revocation of any order made in good faith under subsection (1) or in respect of any loss or damage incurred, or likely or alleged to be incurred by reason of such order.

(4) An order made by the Board in respect of any finance company shall cease to have effect upon the expiration of a period of sixty days from the date on which it is made and it shall he the duty of the Board as soon as practicable and in any event before the expiration of such period to

(5) If the finance company has not made an application to the Supreme Court in accordance with section 43 or where the court has rejected the applicant of the finance company, made in accordance with that section the Director shrill make an application as hereinafter provided to a competent court for the winding up of the company.

(6) During the period in which the business of a finance company is suspended under subsection (I), me Board may if it considers it in the public interest to do so meet any expenses connected with the administration of that company out of the funds of the Central Bank of Sri Lanka.

(7) The competent court may, on any application made by the Director order the winding up of any finance company and accordingly the provisions of the Companies Act, No. 17 of 1982, relating to the winding up or companies subject to the supervision of court shall, mutatis mutandis, apply to the winding up of such company.

(8) Where application is made for winding up of a per son or body of persons (other than a company) under this Act, the value of the assets and liabilities of such person or body of persons shall be ascertained in such, manner and upon such basis as the liquidator thinks fit. The competent court may at any time after making a winding up order authorize the liquidator to realise all assets and may require any person to pay, deliver, convey, surrender or transfer forthwith or within a specified time to the liquidator any money, property or books and other documents in his hands to which such person or body of persons is entitled. A scheme for the purpose of the winding up such person or body of persons shall be prepared by the liquidator and submitted for confirmation to the competent court and the winding up of such person or body of persons shall be carried out according to the scheme.

(9) In any case where an order is made, whether in pursuance of an application under this section or otherwise for the winding up of a finance company, person or unincorporate body of persons (other than a company) then notwithstanding anything in any other written law. the Director or any person authorized in that behalf by the Board shall be appointed to be the liquidator for the purposes of such winding up. Where an order is made to wind up a person or body of persons other than a company the remuneration of a liquidator appointed hereunder and all costs, charges and expenses properly incurred in the winding up shall be payable in priority to all other claims, notwithstanding any other written law to the contrary, out of the assets of such person or body of persons being wound up.

(10) Any costs, charges and expenses incurred in the winding up of a finance company may be paid out of the funds of the Central Bank of Sri Lanka where the Board considers it in the public interest to do so-

(11) In any case where application is made by the Director as provided in subsection (4) for tile winding up of any finance company

(12) Every order made by a competent court under this section shall be subject to an appeal to the Supreme Court and the provisions of the Civil Procedure Code relating to appeals in civil actions shall apply, mutatis mutandis, in the case of any appeal:

Provided that an order under paragraph (a) of subsection (11) shall be final.

(13) Every application to a competent court under this section shall be deemed to be a proceeding of the value of five thousand rupees.

(14) In this section “competent court” in relation to any finance company means the District Court of Colombo or the District Court of the district in which the principal office in Sri Lanka of the finance company is maintained.

(a) Any director, manager, secretary or employee of any finance company who fails to attend in person or to furnish any information or to produce any book, record or other document when required so to do under section 12 , by the director or by any officer authorized by him or who obstructs or falls to permit the Director or any officer authorized by him or auditor authorized by him under paragraph (d) of subsection (3) of section 12 to make any examination under section 12 shall be guilty of an offence under this Act.

(b) Any person who in any report or information furnished to the Director or to any officer authorized by him or to any auditor authorized by him under paragraph (d) of subsection (3) of section 12 makes any statement which he knows to be fake, shall be guilty of an offence under this Act.

(1) If the Board after review of the facts and circumstances upon the receipt of a report by the Director under section 18 is of opinion that a finance company may be made a solvent and viable by action as hereinafter provided, it may by a notice published in the Gazette take over the administration and management of a finance company for such period as may be specified in such notice. The Board may by a subsequent Notice published in the Gazette extend the period specified in the original notice. The Board shall cause copy of every such notice to be sent to the Registrar of Companies who shall make a minute thereof in the books relating to the company.

(2) Where the Board takes over the administration and management of a finance company the Board may

(3) During the period for which the administration and management of a finance company is taken over by the Board, every director, manager and secretary of such finance company shall, unless expressly authorized” to do so by the Board, cease to exercise, perform and discharge any powers, duties and functions with respect to such company.

(4) Where the administration and management of a finance company is taken over by the Board under sub section (1), the Board may where it considers it in the public interest to do so

Provided however that the Board may at any time after the take over of the administration and management of a finance company under subsection (1) suspend the business of the company temporarily, if it is of opinion, that it is in the interest of the public or of the depositors to do so, or direct the Director to apply to a competent court to wind up the company, if on a report made by the Director or any person authorized by the Board, it appears to the Board that the comply cannot be made viable and solvent within a reasonable period of time.

In the event of the Board directing the Director to wind up the finance company, the provisions of section 18 relating to winding up shall apply.

(1) In any case where the Director is satisfied, after examination by himself, of by any officer authorized for him, of the affairs of any finance company or upon information received from the finance company that it would be in the interest of depositors to provide temporary financial accommodation to such finance company, the Director shall report accordingly to the Board and the Board may grant a loan or advance to a commercial bank from the Medium and Long Term Credit Fund established under section. 88E of the Monetary Law Art (Chapter 422), for the purpose of lending to such finance company on such terms and conditions as may be determined by the Board.

(2) The provisions of section 83A to 83E of the Monetary Law Act shall, mutatis mutandis, apply to any loan or advance granted to a commercial bank under the provisions of subsection (1).

(a) review any contract entered into by a depositor with a finance company the management and administration of which is taken over by the Board, and may vary the terms of such contract, including the terms relating to repayment, interest rates and charges where it considers that such contract has been entered into without due regard to the interests of depositors or creditors or due regard to prudent commercial practice;

(b) review any agreement or contract entered into by a finance company the management and administration of which is taken over by the Board, with any person or body of persons and if upon such review, it appears to the Board that the agreement or contract has been entered into without due regard to the interest of the depositors and creditors or without due regard to prudent commercial practice, vary the terms of such agreement or contract.

(1) Where the Board has taken over the administration and management of a finance company under section 20, the Board may, in order to take steps to safeguard the interest of the depositors or creditors by order published in the Gazette, vest the administration, and management of such finance company in any statutory board or person with the consent of such statutory board or person. On the publication in the Gazette of such order, the administration and management of such finance company shall vest in such statutory board or person which shall exercise, perform and discharge with respect to such finance company all the powers, duties and functions conferred or imposed on, or assigned to ; the Board of Directors of such company by or under any written law or by the articles of association, of the company,

(2) Where the Board has vested the administration and management of a finance company in any statutory board or person by order made under subsection (1) the Board may direct any shareholder of such finance company to divest or transfer the ownership of any shares owned by him to a person nominated by the Board on payment by such person of compensation calculated as follows:

(1) If the Board upon review of the facts and circumstances upon the Director making a report under section 18, is of the opinion that any past or present Director, chief executive, manager, employee or an agent of finance company has fraudulently, wrongfully or unlawfully enriched himself or any other person or persons by misapplication of any money or property belonging to the company, the Board may notwithstanding that action has also been taken under section 18 or 20, require such person or persona to repay or restore to the finance company the money or property attributable to the finance company, with interest at such rate as the Board may think fit within such period of time as may be specified by the Board.

(2) Where any person referred to in subsection (1) above fails to restore to the finance company, the monies or properties referred to in that subsection, the Board may

(1) Notwithstanding the provisions of any other written law or the Memorandum and articles of association of a finance company, the Monetary Board may, where a Order has been made by the Board under paragraph (a) of subsection (4) of section 18, on a report made by the Director

(2) A shareholder who fails to comply with a direction given to him under paragraph (d) of subsection (1) shall be guilty of an offence.

(a) notwithstanding anything in section 10 of the Insurance Corporation Act, No. 2 of 1961, or other written law, establish, maintain, manage and control a scheme for the insurance of deposits held by finance companies registered under this Act and require such companies to insure the deposits held by such companies, under such scheme; or

(b) require finance companies registered under this Act to insure the deposits held by such companies under any scheme for the insurance of such, deposits established by any such institution as is specified by the Board.

(1) Where a scheme for the insurance of deposits has been established by the Central Bank under paragraph (a) of section 27 every finance company registered under this Act shall, apply to the Central Bank to insure the deposits held by such company under the scheme.

(2) The Central Bank of Sri Lanka may in its discretion, accept or reject any application made under subsection (i) and where it accepts such, application, require the applicant finance company to pay such, premium to the Central Bank of Sri Lanka on the insurance as may be determined by the Board from time to time having regard to the risks involved.

(3) The premium shall be payable for such periods, at such times and in such manner as may be determined by the Monetary Board.

(4) If an insured finance company makes, any default in the payment of any premium, it shall, for the period of such default, be liable to pay to the Central Bank of Sri Lanka interest on the amount of such premium at such, rate as may be determined by the Board having regard to the losses likely to be incurred by the Board, by reason of such default.

(a) the interest which may be charged from an insured finance company, where it makes default in the payment of premia;

(b) any matter that is stated or is required to be prescribed or in respect of which, a rule is authorized to be made under this Act for the purpose of insuring of deposits of finance companies ;

(c) any other matter affecting, connected with or incidental to the exercise, discharge or performance of the powers, functions and duties of the Central Bank ox Sri Lanka under sections 27 and 28 of this Act.

(1) Where a deposit with any finance company has lain dormant, that is to say, where a depositor has not called for withdrawal of the deposit on maturity for a period of to ten years after maturity, (or where there has been no receipt by the finance company of any written correspondence from the depositor or his lawful representative in relation to the deposit for a period exceeding ten years), the monies lying in deposit together with interest thereon accrued, if any, shall notwithstanding anything contained in any other law, if the Board so directs, be transferred by such finance company to a special account in the Central Bank of Sri Lanka.

(2) Any person who furnishes proof to the satisfaction of the Board, that any monies lying to his credit in his name with any finance company registered under this Act or in the name of a person from whom he derives title have been transferred to a special account in the Central Bank of Sri Lanka under subsection (I) shall, subject to such terms, conditions or restrictions as may be imposed, in respect of such monies, by or under any written law, be entitled to repayment of such monies by the Central Bank of Sri Lanka together with the interest payable on. such monies upto the dale of repayment at such rate as the Board may, from time to time determine, or without such interest, if the Board so decides.

(3) Any monies transferred to a Special account under subsection (1) may be utilised for such purposes as may be determined by the Board after consultation with the Minister in charge of the subject of Finance.

(1) A person shall be disqualified from being appointed or elected as the ease may be, as director, chief executive or secretary of a finance company or from holding such post if such person

(2) Any person who acts as a director, chief executive or secretary of a finance company while being under any disqualification set out in subsection (1), shall be guilty of an offence under this Act.

(1) The Board may make rules on any matter in respect of which rules are authorized to be made under this Act, or which is stated or required to be prescribed.

(2) In particular, and without prejudice to the generality of the powers conferred by subsection (1), the Board may make rules in. respect of all or any of the following matters:

(1) Arty person who, being a director, chief executive, manager, officer or employee or auditor of a finance company

(2) In any prosecution instituted against a person under subsection (1), it shall be a defence to prove that he had reasonable grounds to believe that another person was charged with the duty of securing compliance with the requirements of this Act or with the duty of ensuring that the statements in question were accurate and that such person was competent and in ft position to discharge that duty.

(1) Any person or body of persons who contravenes or fails to comply with any provisions of this Act or any rule, direction, order or requirement made or imposed thereunder or furnishes false information when required under any provision of this Act, to furnish information, shall be guilty of an offence under this Act.

(2) In the case of any offence under this Act committed by a body of persons

Provided however that no such person shall he deemed to be guilty of an offence if he proves that the offence was committed without his knowledge and that he exercised all due diligence to prevent the commission of that offence.

(a) in the case of a company or an incorporated body of persons, the name of such company; and the names of its directors or the name of such incorporate body, the names of the directors of such incorporated body, as the case may be; and

(b) in the case of a person or unincorporated body of persons, the name of such person or members of such unincorporated body of persons as the case may be

(1) The Director may, having regard to the circumstances in which an offence under this Act was committed and with the approval of the Board, compound such offence for a sum not exceeding one hundred thousand rupee;

(2) The compounding of any offence under this section

(1) Where the Board is satisfied that any finance company has

(2) A financial company may tender objections in writing to the Board against the notice of cancellation under subsection (1), within thirty days of the date of receipt of such notice, giving reasons why the licence issued to it under section 7 should not be so cancelled.

(3) After the expiration of sixty days from the date of notification of the cancellation and after considering the objections tendered to the Board under subsection (2), the Board may withdraw such notice or cancel the licence issued to the finance company, and shall notify the finance company accordingly,

(4) A cancellation of a licence under subsection (3), shall take effect

(5) Where the licence of a finance company is so cancelled the Board shall remove the name of the finance company from the register maintained under section 6 and may issue such directions as it considers necessary, including directions for winding up or require the Director to apply for winding up of the company in which event the provisions of section 18 shall apply.

(6) Where the finance company fails to comply with the provisions of subsection (5) within thirty days of the issue, the Board may require the Director to file action for the winding up of the finance company, and the provisions of section 18 shall apply to such winding up.

(1) No person aggrieved by an order made or purported to have been made under section 2 or section 10(2) or section 11(2) or section 18(4) (b) or section 20 or section 24 par section 25 or section 26 or section 41 or who apprehends that he would be affected by any act or any step taken, or proposed to be taken under or purporting to be taken under, any such section shall be entitled to a permanent or interim injunction, an enjoining order, a stay order or any other order having the effect of staying, restraining, or impeding the Board from giving effect to such order.

(2)

(3) Nothing contained in subsection (1) shall effect the powers which the Supreme Court may otherwise lawfully exercise in respect of any application made under Article 126 of the Constitution or in the exercise of the jurisdiction referred to in subsection (2).

(4) The Supreme Court shall before making any order whether interim or final against the Board, in the exercise of the jurisdiction conferred on it by this section afford the Board an opportunity of being heard.

(1) The Control of Finance Companies Act, No. 27 of 1979, is hereby repealed.

(2) Notwithstanding the repeal of the Control of Finance provisions. Companies Act, No. 27 of 1979 every notice, order, rule or direction issued, requirement imposed rule or delegation made under the repealed Act and in force on the day preceding the date of commencement of this Act shall in no far as such notice, order, direction, requirement, rule or delegation is not inconsistent with the provisions of this Act, be deemed to be a notice, order, direction, requirements, rule or delegation issued imposed or made as the case may be under the corresponding provisions of this Act.

(3) Any action taken, order made or direction given under the Control of Finance Companies Act, No, 27 of 1988 read with the Control of Finance Companies regulations made under the Public Security Ordinance during the period commencing on June 16, 1988 and ending on the date of commencement of this Act shall be valid and effectual as if the Public Security Ordinance had authorized the making of those regulations.

(4) No civil or criminal Proceedings shall be instituted or maintained or continued against the Board or any officer, servant or agent of the Board or any other person or authority for any act bona fide, done or omitted to be done by him during the period commencing on June 16, 1988 and ending on the date of commencement of this Act, in pursuance or supposed pursuance of the provisions of the Control of Finance Companies Act, No. 27 of 1979, read with the Control of Finance Companies regulations made under the Public Security Ordinance.

(a) the lending of money on interest ; or

(b) the investment of money in any manner whatsoever ; or

(c) the lending of money on interest and the in vestment of money in any manner whatsoever;

(a) cash in hand ;

(b) balances in a current or deposit account in a commercial bank, fee from any banker lien. or charge ;

(c) Sri Lanka Government Treasury Bills tree from any charge or lien ;

(d) Sri Lanka Government Securities maturing within one year acid free from any charge or lien ;

(e) Central Bank of Sri Lanka securities maturing within one year and free from any charge or lien ;

(f) cash balance if any maintained with the Central Bank of Sri Lanka ;

(i) in relation to a company means the holding of a beneficial interest by another company or an individual or his relative whether singly or taken together, in the shares thereof the paid up value of which exceeds one million rupees or ten per centum of the paid up capital of the company, whichever is less or the existence of guarantee or indemnity given by an individual or his relative or by another company on behalf of such company;

(ii) in relation to a firm means the holding of a beneficial interest in the capital thereof by an individual or his relative which singly or take together represents more than ten per centum of the total capital subscribed by all partners of that firm or the existence of a guarantee or indemnity given by an Individual or his or her spouse or parent or child on behalf of such firm and ;