Chit-fund business an offence.
Continuation of chit-funds upon filing of particulars.
Schedule.
Application of section 3.
"operate" includes manage, form, conduct, organize, advertise and
aid, assist or take part in operating: "Registrar" means the Registrar of Companies.
3. (1) Subject to section 5 and to subsection (2), any person who operates a chit-fund shall be guilty of an offence and shall be liable on conviction to a fine of 10,000 dollars and to imprison- ment for 3 years.
(2) Notwithstanding subsection (1), if an offence is committed under this section by reason only of the breach of one or both of paragraphs (2) and (c) of section $(2), the offender shall be liable to a fine of 1,000 dollars and to imprisonment for one year.
4. (1) Subject to subsection (2) a person who was operating a chit-fund on the 1st December 1971, other than a chit-fund operated in accordance with section 5(2), may continue its opera- tion until completion of the chit-fund or until the 31st December 1973, whichever is the carlier, if, within 30 days after the com- mencement of this Ordinance and upon payment of a fee of 5 dollars, be files with the Registrar in the form set out in the Schedule the particulars required thereby.
(2) Subsection (1) shall not apply in a case where the particulars fled-
(a) are in any respect incomplete;
(b) are false or misleading;
(c) do not adequately identify the chit-fund to which they
refer.
(3) Any person who files false or misleading particulars under this section shall be guilty of an offence and shall be liable on conviction to a fine of 10,000 dollars and to imprison- ment for 3 years.
(4) A form filed under this section shall be available for inspection by any member of the public upon payment of a fee of 1 dollar.
5. (1) Section 3 shall not have effect—
(a) in respect of a chit-fund in operation on the 1st December 1971 until 30 days after the commencement of this Ordinance;
(b) in respect of a chit-fund continuing to operate by virtue
of section 4(1);
(c) in respect of a chit-fund operated in accordance with
subsection (2).
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(2) A chit-fund may be operated it—
(a) there are not more than 30 participants;
(b) the operator is not at the same time operating another
chit-fund:
(c) the common fund put up for sale or payment to the
participants does not exceed 10,000 dollars; and
(d) no benefit accrues to the operator other than a right to
receive the first subscription free of interest,
(3) Notwithstanding anything contained in this section any person who advertises a chit-fund, whether in a newspaper or by any other means, shall be guilty of an offence and shall be liable to a fine of 10,000 dollars and to imprisonment for 3 years.
6. A company which has as its object or as one of its objects the operation of chit-funds shall not be registered under the Companies Ordinance after the commencement of this Ordinance.
7. (1) Subject to subsection (2), a registered company which has as its object or one of its objects the operation of chit-funds shall within 90 days after the commencement of this Ordinance-
(a) amend its memorandum and articles of association in accordance with sections 8(1) and 13(1) of the Companies Ordinance so as to delete all references to the opera- tion of chit-funds, and, if necessary, change its name in accordance with section 22(1) of the Companies Ordin- ance so as to delete any reference therein to chit-funds:
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(b) pass a resolution that it be wound up voluntarily in accordance with section 228(1)(b) of the Companies Ordinance, or
(c) pass a resolution that it be wound up by the court in accordance with section 177(a) of the Companies Ordin- ance and present a petition to that effect under section 179(1) of that Ordinance.
(2) In the case of a registered company continuing to operate
a chit-fund by virtue of section 4(1), the period of 90 days specified in subsection (1) of this section shall run from the last day of operation of the fund.
Prohibition of registration of chit-fund companies. (Cap. 32.)
Alternatives open to registered chit-fund companies.
(p. 32.)
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