BUILDING SOCIETIES ACT, 1989

the society shall in any notice of the meeting given to members of the society state the fact of the statement having been made, and send a copy of the statement to every person who is entitled to notice of a general meeting of the society.

• (4) Subsection (2) need not be complied with by the society concerned if, on the application either of the society or any other person who claims to be aggrieved, the Central Bank is satisfied that the sending of the statement would be likely to diminish substantially public confidence in the society or that the rights conferred by this section are being abused to secure needless publicity for defamatory matter.

• (5) An auditor of a society who has resigned from the office of auditor shall be permitted by the society to attend any such meeting as is mentioned in subsection (3) (b) and the society shall send him all notices of, and other communications relating to, any such meeting that a member of the society entitled to notice of the meeting is entitled to receive and to be heard at any such meeting which he attends on any part of the business of the meeting which concerns him as a former auditor of the society.

87 Qualifications for appointment as auditor.

87.—(1) A person shall not be qualified for appointment as auditor of a building society unless he is a member of a body of accountants membership of which is recognised by the Minister for Industry and Commerce under the Companies Acts as qualifying a person to be an auditor of a company, or is otherwise for the time being authorised by the said Minister under the said Acts to be appointed auditor of a company.

• (2) None of the following persons shall be qualified for appointment as an auditor of a society—

• (a) an officer or employee of the society,

• (b) a person who is a partner of, or in the employment of, or who employs, an officer or employee of the society,

• (c) a body corporate,

• (d) a person who has been an officer or employee of the society within a period in respect of which accounts would fall to be audited by him if he were appointed auditor of the society,

• (e) a parent, spouse, brother, sister or child of an officer of the society, or

• (f) a person who is disqualified under the Companies Acts for appointment as an auditor of a subsidiary or other associated body of the society.

• (3) A person shall not act as auditor of a society at a time when he is disqualified under this Act or under the Companies Acts for appointment to that office and, if an auditor of a society becomes so disqualified during his term of office as such auditor, he shall thereupon vacate his office and give notice in writing to the society concerned and to the Central Bank that he has vacated his office by reason of such disqualification.

88 Auditors' report, right of access to books and to attend general meeting.

88.—(1) The auditors of a building society shall make a report to the members on the accounts examined by them, and on the annual accounts and the directors' report which are to be laid before the society at the annual general meeting during their tenure of office.

• (2) The auditors' report shall be read at the annual general meeting of the society and shall be open to inspection by any member of the society.

• (3) The auditors' report shall state whether—

• (a) they have obtained all the information and explanations which, to the best of their knowledge and belief, were necessary for the purposes of their audit;

• (b) they are of the opinion that proper accounting records have been kept by the society;

• (c) they are of the opinion that proper returns adequate for their audit have been received from branches and agents of the society not visited by them;

• (d) the society's annual accounts are in agreement with the accounting records and the said returns;

• (e) they are of the opinion that the society's annual accounts have been properly prepared so as to conform to the requirements of or under this Act and give a true and fair view—

• (i) in the case of the balance sheet, of the state of the society's affairs as at the end of its financial year;

• (ii) in the case of the income and expenditure account, of the income and expenditure of the society for its financial year; and

• (iii) in the case of the statement of source and application of funds, of the manner in which the society has been financed and financial resources used during its financial year; and

• (f) they are of the opinion that the information given in the directors' report is consistent with the accounting records and the annual accounts for the year.

• (4) It shall be the duty of the auditors in preparing their report under this section to carry out such investigations as will enable them to form an opinion as to whether—

• (a) the society has kept proper accounting records, and

• (b) the society has maintained satisfactory systems of control of its business and records, and systems of inspection and report thereon, and

where the auditors are of opinion that the society has failed to keep proper accounting records or to maintain a satisfactory system of control of its business or records they shall so state in their report.

• (5) Every auditor of a society shall have a right of access at all reasonable times to the books, accounts, records and vouchers of the society and to all other documents relating to its affairs (including deeds relating to property mortgaged to the society), and shall be entitled to require from the officers and employees of the society such information and explanations that are within their knowledge or can be procured by them as he thinks necessary for the performance of the duties of the auditors.

• (6) The auditors of a society shall be entitled to attend any general meeting of the society, to receive all notices of, and other communications relating to, any such meeting that a member entitled to notice of the meeting is entitled to receive and to be heard at any meeting which they attend on any part of the business of the meeting which concerns them as auditors.

• (7) Subsection (3) (e), in its application to the group accounts of a society, shall be read as referring to the society and (so far as it concerns the members of the society) the subsidiaries dealt with in the group accounts.

• (8) Where a society has a subsidiary or other associated body, then—

• (a) if the subsidiary or associated body is a body incorporated in the State, it is the duty of the subsidiary or other associated body and its auditors to give to the society's auditors such information and explanation and such access to documents as these auditors may reasonably require for the purpose of their duties as auditors of the society; and

• (b) in any other case, it is the duty of the society, if required by its auditors to do so, to take all such steps as are reasonably open to it to obtain from the subsidiary or other associated body such information and explanation and such access as are mentioned in paragraph (a).

89 Duties of auditor.

89.—(1) If at any time an auditor of a building society—

• (a) has reason to believe that there exist circumstances which are likely to affect materially the society's ability to fulfil its obligations to shareholders or depositors or meet any of its obligations under this Act,

• (b) has reason to believe that there are material defects in the accounting records, systems of control of the business and records or of inspection and report thereon,

• (c) has reason to believe that there are material inaccuracies in or omissions from any returns made by the society to the Central Bank,

• (d) proposes to qualify any report which he is to provide under this Act, or

• (e) has reason to believe that there are material defects in the system for ensuring the safe custody of all documents of title belonging to the society and deeds relating to property mortgaged to the society,

he shall forthwith report the matter to the Central Bank in writing.

• (2) An auditor of a society shall, if requested by the Central Bank, furnish to the Bank a report stating whether in his opinion and to the best of his knowledge the society has or has not complied with such requirements under this Act as the Bank so requested the auditor to furnish a report on.

• (3) An auditor of a society shall send to it a copy of any report made by him to the Central Bank under subsection (1) or (2).

• (4)
• (a) Whenever the Central Bank is of the opinion that the exercise of its functions under this Act or the protection of the interests of shareholders or depositors so requires, it may require the auditors of a society to supply the Bank with such information as it may specify in relation to the audit of the business of the society.

• (b) The Central Bank may require that, in supplying information for the purpose of this subsection, the auditor shall act independently of the society.

• (5) No duty to which an auditor of a society may be subject shall be regarded as contravened, and no liability to the society, its shareholders, creditors or other interested parties, shall attach to the auditor, by reason of his compliance with any obligation imposed on him by or under this section.

90 Penalty for false statements to auditors.

90.—(1) An officer or employee of a building society or a subsidiary or other associated body who knowingly or recklessly makes a statement to which this section applies that is misleading, false or deceptive in a material particular shall be guilty of an offence.

• (2) This section applies to any statement made to the auditors of a society (whether orally or in writing) which conveys, or purports to convey, any information or explanation which they require under this Act, or are entitled so to require, as auditors of the society.

• (3) An officer or employee of a society or of a subsidary or other associated body who fails to provide to the auditors of the society, within 2 days (not including a Saturday, a Sunday or a public holiday) of the making of the relevant requirement, any information or explanations that the auditors require as auditors of the society and that is within the knowledge of or can be procured by the officer or employee shall be guilty of an offence.

• (4) In a prosecution for an offence under this section, it shall be a defence for the defendant to show that it was not reasonably possible for him to comply with the requirements under subsection (3) to which the offence relates within the time specified in that subsection but that he complied therewith as soon as was reasonably possible after the expiration of such time.

• (5) In this section “officer”, in relation to a subsidiary or other associated body of a society, includes an auditor.

PART VIII Disputes and Complaints

91 Settlement of disputes.

91.—(1) Save as otherwise required by or under this Act, this section applies to—

• (a) any dispute between a building society and a member of the society in his capacity as a member, or a representative of such a member in that capacity, in respect of any matter, rights or obligations arising from the rules of the society or any provision of this Act or statutory instrument under it, other than the construction or effect of a mortgage deed or of any other contract comprised in or based on a document other than the rules of the society, and

• (b) any other dispute or class of dispute to which the rules of a society expressly apply it,

and, accordingly, in this section “dispute” means a dispute to which this section applies.

• (2) Where the rules of a society so provide, the Circuit Court may hear and determine a dispute under this section and a determination of the dispute by the Circuit Court shall be final and binding on the parties and any persons claiming under them, but the Circuit Court may, at the request of a party to the dispute, state a case to the High Court on a point of law.

• (3) Where the rules of a society provide that a dispute shall be determined by arbitration, the Arbitration Acts, 1954 and 1980, shall, subject to any necessary modifications, apply to that dispute, and—

• (a) the rules shall, for the purposes of this subsection, be deemed to be an arbitration agreement within the meaning of the Arbitration Acts, 1954 and 1980;

• (b) arbitrators shall be named and selected in accordance with the rules or, if they make no such provision, one arbitrator shall be named by the board of directors and one by the member;

• (c) an arbitrator shall not be beneficially interested, whether directly or indirectly, in the funds of the society; and

• (d) the society shall maintain a panel of arbitrators and the names of the arbitrators appointed to the panel by the society shall be duly entered in a register kept by the society for this purpose at its chief office and a copy of the register shall be kept available for inspection by members and the Central Bank at reasonable times.

• (4) Where the rules of a society provide that a dispute shall be determined by the Central Bank, the Arbitration Acts, 1954 and 1980, shall, subject to any necessary modifications, apply to that dispute, and—

• (a) the rules shall, for the purposes of this subsection, be deemed to be an arbitration agreement within the meaning of the Arbitration Acts, 1954 and 1980;

• (b) the Central Bank shall be deemed to be a single arbitrator for the purposes of those Acts, and any provision contained therein relating to the appointment of additional arbitrators or umpires shall not apply.

• (5) The Minister may by regulations, made after consultation with the Central Bank, provide that the functions of the Bank under subsection (4) shall devolve—

• (a) on an adjudicator appointed under a scheme established pursuant to regulations under section 92, or

• (b) if there is no such scheme, on an adjudicator otherwise appointed under a non-statutory scheme for the adjudication of complaints against building societies or their subsidiaries or other associated bodies,

and, so long as such regulations are in force, references to the Central Bank in subsection (4), and in the relevant provisions of the rules of a society, shall be read as references to the said adjudicator.

• (6) Nothing in this section shall prevent a society, any member of a society or any person claiming through or under a member, from obtaining in the ordinary course of law any remedy to which the society, member or person is entitled by law in respect of any mortgage or of any other contract other than the rules of a society.

• (7) Any reference in the rules of a society to a dispute shall, except in so far as they otherwise expressly provide, be construed as referring only to a dispute to which this section applies.

92 Investigation of complaints.

92.—(1) The Minister may, by regulations, made after consultation with the Central Bank, require a building society to establish or join in establishing a scheme or schemes for the investigation of complaints against the society or any of its subsidiaries or other associated bodies in relation to a prescribed matter of complaint.

• (2) Without prejudice to the generality of subsection (1), regulations under this section may make provision in relation to any one or more of the following—

• (a) the establishment and administration of a scheme,

• (b) the manner of appointment of an independent adjudicator to conduct investigations,

• (c) the matters to be subject to investigation under the scheme,

• (d) the grounds on which a complaint must be based,

• (e) the powers of, and procedure to be followed in the conduct of investigations by, the adjudicator,

• (f) the circumstances in and the extent to which determinations are binding,

• (g) the procedures for the making of complaints,

• (h) the publication of the adjudicator's findings,

• (i) the approval of the scheme by the Central Bank.

• (3) The reference of a complaint under a scheme established under this section shall not affect the rights of a member to have a dispute to which section 91 applies determined as provided for by the rules of the society, but any such dispute that relates to a matter covered by such a scheme may, if both the complainant and the society agree, instead of being so determined be determined under such a scheme; such determination being binding on both parties.

PART IX Savings Protection

93 Deposit at Central Bank.

93.—(1) A building society shall not exercise any function to which an authorisation under section 17 relates unless it maintains on deposit with the Central Bank an amount determined in accordance with this section.

• (2) The amount of a deposit by a society under this section shall be a sum equal to 0.2 per cent., or such other proportion as may be prescribed in regulations made under section 94, of the society's total liabilities in respect of—

• (a) shares and deposits (including deposits on current accounts if any, but, subject to paragraph (b), excluding shares and deposits specified in subsection (4) and deposits represented by negotiable certificates of deposit) denominated in Irish pounds, and

• (b) such other shares and deposits as may be prescribed in regulations made under section 94,

issued or held by a society at its offices in the State but shall not be less than £20,000.

• (3) The amount of the deposit shall be calculated by the Central Bank as soon as practicable after the commencement of this section or at the time of granting an authorisation, as may be appropriate, and shall be recalculated in respect of every society every 12 months (or as close thereto as reasonably practicable) thereafter by reference to such returns as are made by the society at the request of the Bank.

• (4) For the purpose of calculating its deposit under this section, shares in and deposits with a society by any of the following shall not be reckoned, that is to say—

• (a) another society,

• (b) a bank,

• (c) a trustee savings bank certified under the Trustees Savings Banks Acts, 1863 to 1979,

• (d) the Agricultural Credit Corporation public limited company,

• (e) the company formed and registered by virtue of section 2 of the Industrial Credit Act, 1933,

• (f) any person not being a bank, established outside the State who, in the opinion of the Central Bank, is duly authorised outside the State to carry on the business of banking,

• (g) such other persons as may be prescribed in regulations made under section 94.

• (5) The amount of a deposit under this section shall, where necessary, be increased to the appropriate amount calculated under subsection (3) not later than 7 days, or such longer period as the Central Bank may agree to in writing, after the date of the receipt by the society of notification from the Bank of the amount required to effect the increase.

• (6) The Central Bank may settle the amount of a deposit under this section at the nearest round figure in hundreds of pounds and by rounding up to such a figure where the amount calculated under subsection (3) is divisible in pounds by £50.

• (7) A deposit under this section shall carry interest at such a rate or rates and payable in such manner and at such times as may be determined by the Central Bank from time to time.

• (8) Any charge purported to be created on a deposit under this section other than by the Central Bank shall be void.

• (9) A deposit under this section shall not be subject to any form of execution in satisfaction of any claim, or any judgment, order or decree of any court in the State in favour of any creditor, otherwise than under and in accordance with the provisions of this Act or regulations made thereunder.

94 Protection of shareholders' and depositors' funds.

94.—(1) The Minister may, after consultation with the Minister for Finance and the Central Bank, by regulations, provide for the application, subject to such modifications as he considers necessary, to shareholdings in and deposits with building societies of the provisions of any enactment for the protection to any extent of deposits with banks (“the savings protection scheme”).

• (2) Without prejudice to the generality of subsection (1), regulations under that subsection may—

• (a) provide for the transfer of deposits maintained by building societies with the Central Bank by virtue of section 93 to any account maintained by the Bank for the purposes of the savings protection scheme,

• (b) provide, as necessary, for the treatment of shareholdings in a society as deposits with the society for the purposes of the scheme,

• (c) provide for the exclusion of a specified class of shareholders in and depositors with a society from protection under the scheme,

• (d) specify any class of shareholdings in and deposits with a society that may benefit under the scheme,

• (e) change, as necessary, the rights and duties of a liquidator in the winding up of a society,

• (f) require that, where the liability of a society to a person is related to both shares and deposits, the amount of any payment under the scheme be first applied to reducing the liability of the society in respect of the shares,

• (g) provide for other payments in prescribed circumstances to be charged on the account referred to in paragraph (a),

• (h) provide for the amendment as necessary of the relevant enactments referred to in subsection (1),

• (i) prescribe shares and deposits for the purposes of section 93 (2) (b) and (4) (g).

PART X Amalgamations and Transfers of Engagements

95 Amalgamation of societies.

95.—(1) Subject to compliance with section 97, any 2 or more building societies may amalgamate by forming a building society as their successor.

• (2) In order to form a society as their successor the amalgamating societies must—

• (a) agree on the objects of their successor and the extent of its powers in a memorandum which complies with the requirements for the time being of Part I of the Second Schedule,

• (b) agree on the rules for the regulation of their successor which comply with the requirements of Part II of the Second Schedule and any regulations for the time being made under section 11 (2),

• (c) each approve the terms of the amalgamation by special resolution, which also approves the memorandum and rules of their successor, and

• (d) make application jointly under section 98 to the Central Bank for confirmation of the amalgamation and send to the Bank 3 copies of the memorandum and rules of their successor, each copy signed by the secretary of each of the societies.

• (3) The Central Bank if it confirms the amalgamation under section 98, shall, if it is satisfied as respects the matters as to which it must be satisfied before it registers the memorandum and rules of a society, register the memorandum and rules of the successor society and issue to it a certificate of incorporation and specify a date (“the specified date”) as from which the incorporation takes effect.

• (4) On the specified date, all the property, rights and liabilities of each of the societies whose amalgamation was confirmed by the Central Bank shall by virtue of this subsection stand transferred to and vested in the society so incorporated as their successor.

• (5) On the specified date, each of the societies to which the successor succeeds shall be dissolved by virtue of this subsection; but the transfer effected by subsection (4) shall be deemed to have been effected immediately before the dissolution.

• (6) If, on the specified date, the societies whose amalgamation was confirmed by the Central Bank are all authorised, their successor shall be deemed to be authorised for the purposes of this Act as from that date.

• (7) The Central Bank shall record in the public file of the successor the fact that, by virtue of subsection (6), the society is deemed to be authorised for the purposes of this Act.

96 Transfer of engagements.

96.—(1) Subject to compliance with section 97, a building society may transfer its engagements to any extent to another society which, in accordance with this section, undertakes to fulfil the engagements.

• (2) A society, in order to—

• (a) transfer its engagements to any extent, or

• (b) undertake to fulfil the engagements of another society,

must resolve to do so by a special resolution or, if the Central Bank consents in either case in circumstances where it considers it expedient to do so, by resolution of the board of directors.

• (3) The extent of the transfer, as so resolved by the society making and the society taking the transfer, shall be recorded in an instrument of transfer of engagements.

• (4) A transfer of engagements between societies shall be of no effect unless—

• (a) the transfer is confirmed by the Central Bank under section 98, and

• (b) a registration certificate is issued in respect of the transfer under subsection (5).

• (5) Where the Central Bank confirms a transfer of engagements between societies, it shall—

• (a) register a copy of the instrument of transfer of engagements, and

• (b) issue a registration certificate to the society taking the transfer,

and, on such date as is specified in the certificate and to the extent provided in the instrument of transfer of engagements, the property, rights and liabilities of the society transferring its engagements shall, by virtue of this subsection, stand transferred to and vested in the society taking the transfer.

• (6) The Central Bank shall keep a copy of the instrument and of the registration certificate issued under subsection (5) in the public files of the societies involved.

• (7) Where all its engagements have been transferred, a society shall, by virtue of this subsection, be dissolved on the date specified in the registration certificate; but the transfer effected by subsection (5) shall be deemed to have been effected immediately before the dissolution.

97 Statement for members relating to proposed amalgamation or transfer of engagements.

97.—(1) A building society proposing to amalgamate with one or more other societies, to transfer its engagements to another society or to undertake to fulfil the engagements of another society shall, unless the Central Bank, in the case of a society transferring engagements or undertaking to fulfil engagements, has consented under section 96 to its proceeding by resolution of the board of directors, cause to be sent to every member entitled to notice of a meeting of the society a statement, in such form as the Central Bank may direct, showing—

• (a) the financial position of each society concerned,

• (b) the interest of the directors of each society concerned,

• (c) any compensation or consideration proposed to be paid or given to the directors or other officers of each society concerned,

• (d) details of any payments proposed to be made to members of each society concerned in consideration of the proposed amalgamation or transfer,

• (e) any changes to be made, in connection with the amalgamation or transfer, in the terms governing outstanding loans,

• (f) the details of the arrangements proposed in relation to employees of each society, and

• (g) any other matter which the Bank may require in the case of a particular amalgamation or transfer.

• (2) A statement to be sent to each member of a society under subsection (1) shall be so sent that every member entitled to notice of a meeting of the society receives it not later than the date on which he receives notice of any resolution in favour of the proposal to be moved at a meeting of the society or of any postal ballot to be held on the proposal.

• (3) A statement under this section shall not be sent to members unless its contents have been approved by the Central Bank.

98 Confirmation of amalgamation or transfer.

98.—(1) An application for confirmation by the Central Bank of an amalgamation of building societies or a transfer of engagements shall be made in such manner as the Bank may specify.

• (2) A society which makes, or joins in making, an application for confirmation of an amalgamation or a transfer shall, within 7 days after the date of the application, cause to be published, in at least 2 daily newspapers published in the State and circulating in the areas in which the chief offices of the societies concerned in the proposal are situated, a notice giving particulars of the application and indicating that objections or representations relating to it may be made in writing to the Central Bank within such period (being not less than 21 days after the date of publication of the notice) as may be specified in the notice.

• (3) A notice under subsection (2) shall be in such form as the Central Bank may specify and shall indicate that a copy of the statement prepared under section 97 may be obtained on demand at the chief office of the society during the ordinary office hours of the society.

• (4) Objections and representations relating to an application under subsection (1) may be made to the Central Bank within the period specified in the relevant notice published under subsection (2).

• (5) The Central Bank shall allow the society or societies seeking confirmation of an amalgamation or transfer an opportunity to comment on the representations made before the expiration of such period as the Bank specifies in a notice to the society.

• (6) The Central Bank, having considered any application, objection, representation and comment under this section, shall either—

• (a) confirm the amalgamation or transfer; or

• (b) where it is satisfied that—

• (i) confirmation would be contrary to the public interest or the Bank's functions as respects societies,

• (ii) in the case of an amalgamation or in the case of a transfer which was the subject of a special resolution, some information material to the members' decision about the amalgamation or transfer was not made available to all the members eligible to vote, or

• (iii) some relevant requirement of this Act or the rules of any of the societies participating in the amalgamation or transfer was not fulfilled or not fulfilled as regards that society,

subject to subsection (7), refuse to confirm the amalgamation or transfer.

• (7) The Central Bank shall not be precluded from confirming an amalgamation or transfer by virtue only of the non-fulfilment of some relevant requirement of this Act or the rules of a society if it appears to the Bank that it could not have been material to the members' decision about the amalgamation or transfer and the Bank is satisfied that the failure may be disregarded for the purposes of this section.

• (8) A failure to comply with a requirement of this Part or any rules of a society shall not invalidate an amalgamation or transfer but a society which and any person who fails to comply with any requirement of this Part shall be guilty of an offence.

99 Compensation for loss of office and bonuses to members.

99.—(1) Where the terms of an amalgamation of, or transfer of engagements between, building societies include provision—

• (a) for compensation to be paid by a society to or in respect of any director or other officer of that or any other society for loss of office or diminution of emoluments attributable to the amalgamation or transfer, or

• (b) for part of the funds of one or more of the participating societies to be distributed in consideration of the amalgamation or transfer among any of the members of the participating societies,

such provision must be approved by the special resolution giving the approval of the society to the terms of the amalgamation or transfer unless the case falls within subsection (2).

• (2) Where the terms of a transfer of engagements between societies include provisions for compensation for loss of office or a distribution of funds as in subsection (1) and a society concerned applies to the Central Bank under section 96 (2) for its consent to the society's approving the transfer of engagements or the undertaking to fulfil engagements by a resolution of the board of directors instead of a special resolution of the society, the Bank shall not give its consent unless it is satisfied that the compensation or the distribution proposed to be made by each society is, in all the circumstances, justified and reasonable.

• (3) In this section—

“compensation” includes the provision of benefits in kind;

“distribution of funds” with reference to members, includes distribution by means of a special rate of interest available to members for a limited period;

“loss of office” includes, in relation to an officer of a society holding office in a subsidiary or other associated body of that society by virtue of his position in that society, the loss of that office.

PART XI Conversion to Public Limited Company

100 Interpretation of this Part.

100.—In this Part—

“borrowing member” has the meaning assigned to it by section 71;

“company” means a public company limited by shares within the meaning of the Companies Acts;

“conversion date” means the date on which the society becomes converted and is registered as a company;

“conversion scheme” means a scheme drawn up by the board of directors of a society for the conversion of the society into a company;

“successor company” means the company into which a society converts itself.

101 Conversion of a society to a public limited company.

101.—(1) A building society may, subject to this Part, convert itself into a company.

• (2) In order to convert into a company a society must—

• (a) approve a conversion scheme by a conversion resolution pursuant to section 71,

• (b) obtain the confirmation of the Central Bank to the conversion scheme under section 104, and

• (c) have the society registered as a company under the Companies Acts in accordance with the provisions of this Part and any regulations made thereunder.

• (3) A conversion scheme for the purposes of subsection (2) shall—

• (a) state the name of the proposed company,

• (b) state in relation to the proposed company the amount of the proposed authorised share capital and the amount of such capital proposed to be issued on conversion,

• (c) have annexed to it the memorandum of association and the articles of association of the proposed company that comply with the requirements of the Companies Acts,

• (d) specify the names of the persons who are proposed to be the first directors and auditors of the proposed company,

• (e) specify the persons or classes of persons who will be members of the proposed company,

• (f) specify, in the case of persons or classes of persons who are members of the society and who will be members of the proposed company, by reference to the shareholding of those persons or classes of persons in the society—

• (i) their entitlement to shares in the proposed company, and

• (ii) their rights (if any) to subscribe for shares in the proposed company,

and, in either case, the rights attaching to the shares,

• (g) specify, in the case of persons or classes of persons (if any) who are members of the society and who will not be members of the proposed company, the rights and liabilities of such persons or classes of persons,

• (h) specify the changes proposed in the society's investments (if any) in subsidiaries and other associated bodies in consequence of the conversion,

• (i) specify, in the case of persons or classes of persons who are members of the society at the conversion date, the rights of such persons or classes of persons to a distribution of its assets in the event of the successor company being wound up within 5 years of the conversion date, and if there are to be no such rights the scheme shall so state,

• (j) specify the terms on which the shareholdings of members of the society will be held as deposits by the successor company,

• (k) specify the terms of any proposed distribution of the funds of the society in connection with the conversion scheme, and

• (l) provide for such other and related matters as the Central Bank may specify.

• (4) A society proposing to convert into a company shall, at least 6 months prior to the date on which the conversion resolution is intended to be moved at a general meeting of the society or voted on in a postal ballot, advise the Central Bank of the intention to do so and shall consult with the Bank as to the matters to be provided for in the conversion scheme.

• (5) A conversion scheme under this section shall not be sent to the members of the society unless the scheme has been approved by the Central Bank as meeting the requirements of or under this Part.

• (6) The terms of a conversion scheme shall restrict any rights conferred on members of the society entitling them to shares in the successor company, to acquire shares in the successor company in priority to other subscribers or to any distribution of the funds of the society, in the case of those persons who become members of the society after 21 December, 1988, to those members who held shares in the society throughout the period of 2 years which expired with the day on which notice is given to members of the conversion resolution.

102 Protective provisions.

102.—(1) A successor company shall not for a period of 5 years after the conversion date—

• (a) offer to the public, or allot or agree to allot with a view to their being offered for sale to the public, any shares in or debentures of the company,

• (b) allot or agree to allot any share in or debenture of the company, or

• (c) register a transfer of shares in or debentures of the company,

if the effect of—

• (i) the offer, the allotment or the registration of the transfer would be that 15 per cent. or more of the shares in or debentures of the company would be held by, or by nominees for, any one person, or

• (ii) the offer, the allotment or the registration of the transfer of shares would be that 15 per cent. or more of the voting rights attaching to the company's shares would be held by, or by nominees for, any one person or by persons or their nominees acting in concert.

• (2) The articles of association of the successor company shall include provisions such as will secure that the company shall not take any action in contravention of subsection (1) and no alteration in these provisions shall be made by the company during the 5 year period specified in that subsection.

• (3) Any allotment or registration of a transfer of shares or debentures in contravention of subsection (1) shall be void and any voting rights held by, or by nominees for, any one person or by persons or their nominees acting in concert in excess of a figure representing 15 per cent. of the total voting rights shall not be exercisable by that person or persons or by their nominees.

• (4) The Central Bank may, if it considers it necessary to do so in the interests of depositors with the successor company, direct by notice to the company that subsections (1), (2) and (3) shall cease to apply to it.

• (5) In this section “transfer” in relation to shares or debentures does not include a transfer to a person to whom the right to any shares or debentures has been transmitted by operation of law.

103 Conversion statement.

103.—(1) Before a conversion resolution is moved pursuant to section 101 a statement in accordance with subsection (2) shall be sent by the building society to every member entitled to notice of the meeting of the society at which the conversion resolution is to be moved or, as the case may be, of the postal ballot.

• (2) Every statement required by subsection (1) shall—

• (a) summarise in sufficient detail, to enable persons entitled to vote to decide how to vote on the resolution, the matters required to be referred to in, and the documents required to be annexed to, the conversion scheme by section 101;

• (b) state the reasons for the proposal to convert;

• (c) specify any proposed change in the principal activities of the society to be carried on by its successor with particular reference to its proposed policy in relation to the making of loans for the provision and improvement of housing and the determination of the rate of interest to be charged on such subsisting and future loans;

• (d) state the financial position and record of the society and its subsidiaries;

• (e) state the interest (if any) of the officers of the society in the conversion;

• (f) state the compensation or other consideration (if any) proposed to be paid to or in respect of the officers of the society;

• (g) state the manner in which the salary, fees, borrowing rights and other benefits of officers of the society to be appointed to any position by the successor company or any company associated with it will be affected;

• (h) state that a full and complete copy of the scheme for conversion may be obtained on demand and free of charge by any member at every place of business of the society at any time during normal business hours; and

• (i) deal with such other matters as the Central Bank may specify.

• (3) A statement under this section shall not be sent to members of the society unless the contents have been approved by the Central Bank.

104 Confirmation and registration of conversion scheme by Central Bank.

104.—(1) An application by a building society that has duly approved a conversion scheme in accordance with this Part shall be made to the Central Bank for confirmation of the scheme within 14 days of the meeting at which the society approved the scheme by forwarding to the Bank a copy of the resolution as passed together with 3 copies of the scheme as approved by the society.

• (2) Subsections (1) to (5), (7) and (8) of section 98 shall, subject to this section and any necessary modifications, apply to an application to the Central Bank for confirmation of a conversion scheme under this section.

• (3) The Central Bank shall notify the Minister and the Minister for Finance when confirming a conversion scheme.

• (4) The Central Bank, having considered an application under subsection (1), any objection or representation received and any comment by the society shall confirm the conversion scheme unless it is of the opinion that—

• (a) confirmation would be contrary to the public interest, or

• (b) some information material to the members' decision about the conversion scheme was not made available to all the members eligible to vote, or

• (c) some relevant requirement of this Act or the rules of the society was not fulfilled, or

• (d) there is a substantial risk that the successor company will not be granted a licence under section 9 of the Act of 1971.

• (5) Where the Central Bank confirms a conversion scheme it shall register the scheme and the conversion resolution and send to the applicant a certificate of registration which shall be sufficient evidence unless the contrary is proved that the requirements of this Part in relation to the conversion scheme have been complied with.

• (6) The Central Bank shall forthwith publish such notice of confirmation and registration of the scheme as it considers appropriate.

105 Petition to High Court against conversion scheme.

105.—(1) A petition for the cancellation of a conversion scheme as confirmed under section 104 may be made to the Court—

• (a) by not less than 100 members who were qualified to vote on the conversion resolution approving the conversion scheme, or

• (b) with the approval of the Court, by any member of the society.

• (2) A petition under this section shall be made within one month after the date on which the Central Bank has published notice of its confirmation and registration of the conversion scheme under section 104.

• (3) A petition under subsection (1) (a) may be made on behalf of one or more of the persons entitled to make the petition by such one or more of their number as may be appointed in writing for the purpose.

• (4) Where a petition has been made to the Court, the Court shall as soon as may be send a copy of the petition to the Central Bank and to the society.

• (5) On a petition under subsection (1) the Court may make an order confirming or cancelling the conversion scheme on such terms and conditions as it thinks fit.

• (6) In exercising its powers under subsection (5) the Court shall have regard only to the rights and interests of the members of the society, or any class of them.

• (7) No appeal from any order made under subsection (5) shall be brought after the expiration of one month from the date of perfection of the order.

106 Registration of society as a company.

106.—(1) As soon as may be but not sooner than one month after the registration pursuant to section 104 (5) and, where a petition is made to the Court under section 105, the petition is finally determined, the building society shall deliver, to the registrar of companies—

• (a) the following documents—

• (i) a copy of the conversion resolution under section 101 certified by the Central Bank as registered under section 104,

• (ii) a copy of the scheme confirmed and registered by the Central Bank under section 104,

• (iii) the Court order under section 105, if any,

• (iv) the certificate of incorporation of the society as a building society,

and

• (b) the memorandum and articles of association of the successor company and such other documents and fee as are required under the Companies Acts to register a company.

• (2) On receiving the documents listed in subsection (1) and on being satisfied that all the requirements of the Companies Acts in respect of registration of memorandum and articles and of matters precedent and incidental thereto have been complied with the registrar of companies shall retain and register the memorandum and articles and issue a certificate of incorporation for the company.

• (3) The certificate of incorporation as a company shall be sufficient evidence until the contrary is shown that the requirements of this section have been complied with and that the society was on the date shown in the certificate duly registered as a company under the Companies Acts.

• (4) On the date shown in the certificate of incorporation as a company the society shall cease to be incorporated under this Act and shall be a company incorporated under the Companies Acts and those Acts shall apply to it accordingly.

• (5) The registrar of companies shall forthwith publish as he considers appropriate notice of the registration of the society as a company.

• (6) On the registration of a society as a company—

• (a) all persons who are to be members of the company shall in accordance with the terms of the conversion scheme be members of the company; and

• (b) the shares, if any, in the capital of the company to which all such persons are entitled in accordance with the conversion scheme shall be deemed to be allotted to such persons.

• (7) Notwithstanding anything contained in section 58 or section 116 of the Companies Act, 1963, no company into which a society has become converted pursuant to this Part shall be required within 5 years of the conversion date—

• (a) to show on the list required to be delivered to the registrar of companies by section 58 of the Companies Act, 1963, or

• (b) to enter in the register of its members referred to in section 116 of the Companies Act, 1963,

the occupation of any person who immediately before the conversion date was a member of the society if the register of members of the society did not contain the occupation of that person.

107 Consequential provisions on conversion of society.

107.—(1) Where a building society becomes converted into a company pursuant to this Part—

• (a) every shareholding in and deposit with the society shall on conversion become a deposit of the same amount with the successor company, and

• (b) the business, property, rights and liabilities of the society, shall, on the conversion date, vest in the company.

• (2) Without prejudice to the generality of subsection (1), the following provisions shall have effect where a society becomes converted into a company pursuant to this Part, that is to say—

• (a) a reference (express or implied) to the society in any instrument made, given, passed, or executed before the conversion date shall be read and construed as a reference to the company;

• (b) except as provided in subsection (3), all contracts, agreements, conveyances, mortgages, deeds, leases, licences, other instruments, undertakings and notices (whether or not in writing) entered into by, made with, given to or by, or addressed to the society (whether alone or with any other person) before the conversion date and subsisting immediately before the conversion date shall, to the extent that they were previously binding on and enforceable by, against, or in favour of the society, be binding on and enforceable by, against, or in favour of the company as fully and effectually in every respect as if, instead of the society, the company had been the person by whom they were entered into, with whom they were made, or to or by whom they were given or addressed as the case may be;

• (c) an instruction, order, direction, mandate, or authority given to the society and subsisting immediately before the conversion date shall be deemed to have been given to the company;

• (d) a security held by the society as security for a debt or other liability to the society incurred before the conversion date shall be available to the company as security for the discharge of that debt or liability and, where the security extends to future or prospective debts or liabilities, shall be available as security for the discharge of debts or liabilities to the company incurred on or after the conversion date; and, in relation to a security, the company shall be entitled to all the rights and priorities (howsoever arising) and shall be subject to all liabilities to which the society would have been entitled or subject if the society had not become converted into a company;

• (e) all the rights and liabilities of the society as bailor or bailee of documents or chattels shall be vested in and assumed by the company;

• (f) a negotiable instrument or order for payment of money which before the conversion date is drawn on or given to or accepted or endorsed by the society or payable at a place of business of the society shall, unless the context otherwise requires, have the same effect on and after the conversion date as if it had been drawn on or given to or accepted or endorsed by the company instead of the society or was payable at the place of business of the company;

• (g) nothing effected or authorised by this Part—

• (i) shall be regarded as placing the society, or the company, or any other person in breach of contract or confidence or as otherwise making any of them guilty of a civil wrong; or

• (ii) shall be regarded as giving rise to a right to any person to terminate or cancel any contract or arrangement or to accelerate the performance of any obligation; or

• (iii) shall be regarded as placing the society, or the company, or any other person in breach of any enactment or rule of law or contractual provision prohibiting, restricting or regulating the assignment or transfer of any property or the disclosure of any information; or

• (iv) shall release any surety wholly or in part from any obligation; or

• (v) shall invalidate or discharge any contract or security;

• (h) any action, arbitration or proceedings, or cause of action which immediately before the conversion date is pending or existing by, against, or in favour of the society or to which the society is a party may be prosecuted, and without amendment of any writ, pleading, or other document, continued and enforced by, against, or in favour of the company;

• (i) on the conversion date each employee of the society shall become an employee of the company but, for the purposes of every enactment, law, award, determination, contract and agreement relating to the employment of each such employee, the contract of employment of that employee, shall be deemed to have been unbroken and the period of service with the society shall be deemed to have been a period of service with the company, and the terms and conditions of employment of each such employee shall, until varied, be identical with the terms and conditions of that employee's employment with the society immediately before the conversion date and be capable of variation in the same manner.

• (3) Where a society becomes converted into a company pursuant to this Part and the conversion scheme provides for the conversion or alteration of the rights or liabilities of any person that were subsisting immediately before the conversion date, those rights and liabilities shall, notwithstanding subsection (2), cease to be enforceable by, against, or in favour of the company on or after the conversion date except in accordance with that scheme.

• (4) Where a society becomes converted into a company pursuant to this Part and the conversion scheme provides for any rights or liabilities to arise immediately after the conversion date, those rights and liabilities shall be enforceable by, against, or in favour of the company on and after the conversion date.

108 Conversion regulations.

108.—The Minister for Finance may, by regulations, make further provision in relation to the conversion of a building society into a company under this part including provision for and in connection with the transition from regulation and supervision by and under this Act to regulation and supervision by and under the Companies Acts and the Currency and Central Bank Acts, 1927 to 1971.

PART XII Winding up, etc.

109 Winding up.

109.—(1) Subject to this section, a building society may be wound up in accordance with the Companies Acts and accordingly those Acts shall, subject to any necessary modifications, apply as if the society were a company limited by shares.

• (2) In the application of the Companies Acts to the winding up of a society—

• (a) a reference to “the registrar of companies” in the Act of 1963 shall be construed as a reference to the Central Bank,

• (b) a reference to “the articles of association” in the Act of 1963 shall be construed as a reference to the rules of a society,

• (c) a reference to “a special resolution” in the Act of 1963 shall be construed as a reference to a special resolution of a society within the meaning of this Act, and

• (d) “secretary” in section 224 of the Act of 1963 shall be construed as the chief executive of a society.

• (3) A society may be wound up by the Court if—

• (a) the society has by special resolution resolved that the society be wound up by the Court,

• (b) the number of members is reduced below 10 or the number of directors below 3,

• (c) the society, being a society registered as a building society under this Act or the repealed enactments, has not been granted an authorisation and more than one year has expired since it was so registered,

• (d) the society is unable to pay its debts,

• (e) the society has had its authorisation revoked under section 40, or

• (f) the Court is of opinion that it is just and equitable that the society should be wound up.

• (4)
• (a) A petition for the winding up of a society may, notwithstanding anything in section 215 of the Act of 1963, be presented by the Central Bank.

• (b) Sections 213 and 215 (a) and (d) and 296 of the Act of 1963 shall not apply to the winding up of a society.

• (5) Notwithstanding anything in sections 217, 234, 256, 280 and 298 of the Act of 1963, an application to the Court under any of those sections may be made by the Central Bank.

• (6) The winding up of a society shall not bar the right of the Central Bank to have it wound up by the Court.

• (7) Notice of any resolution or application for the winding up of a society shall be given to the Central Bank.

• (8) Part X of the Act of 1963 shall not apply to a society and, notwithstanding anything in that or any other Act, a society may not be wound up except in accordance with this section.

• (9) Where a society is being wound up, a person to whom a loan has been made by the society under a mortgage or other security shall not be liable to pay the amount payable in respect of the loan except at the time or times and subject (as may be appropriate) to the conditions set out in the mortgage or other security.

• (10) The liquidator in the exercise of his powers under section 231 (2) (a) of the Act of 1963 shall not dispose of any of the society's assests secured by mortgage of freehold or leasehold estate or interest on terms as respects the loans other than terms which the Court is satisfied are just and equitable and which the borrowers would have been reasonably entitled to expect if the society had not been wound up.

• (11) The Central Bank may appoint one or more officers of the Bank or other representatives who shall be entitled to—

• (a) attend any meeting of creditors of a society, and

• (b) be a member of any committee of inspection appointed under section 233 or 268 of the Act of 1963.

• (12) An officer or representative of the Central Bank appointed to be a member of a committee of inspection shall not be removed from office without the consent of the Bank and shall not be counted in computing any minimum or maximum number of members of such committee specified in any enactment.

• (13) Where the winding up of a society commences within one year after the society has changed its name, the former name as well as the existing name shall appear on all notices and advertisements relating to the winding up.

110 Cancellation of registration.

110.—(1) The Central Bank shall cancel the registration of a building society that has been—

• (a) dissolved by virtue of section 95 or 96,

• (b) wound up under section 109 and dissolved, or

• (c) converted into a public limited company under Part XI.

• (2) Where the Central Bank is satisfied, with respect to a society—

• (a) that a certificate of incorporation has been obtained for the society by fraud or mistake and that the society is not an authorised society,

• (b) that the society has ceased to function, or

• (c) that the society has failed to comply with section 124 (5),

the Bank may cancel the registration of the society.

• (3) Without prejudice to subsection (2), the Central Bank may, if it thinks fit, cancel the registration of a society at the society's request, evidenced in such manner as the Bank may direct.

• (4) Before cancelling the registration of a society under subsection (2), the Central Bank shall give to the society not less than 2 months' notice, specifying the grounds of the proposed cancellation.

• (5) Where the registration of a society is cancelled under subsection (2), the society may within 1 month appeal to the Court and on any such appeal the Court may, if it thinks proper, set aside the cancellation.

• (6) Where the registration of a society is cancelled under subsection (2) or (3), then, subject to the right of appeal conferred by subsection (5), the society shall cease to be a building society within the meaning of this Act.

• (7) Subsection (6) shall have effect in relation to a society without prejudice to any liability actually incurred by the society and any such liability may be enforced against the society as if the cancellation had not taken place.

• (8) As soon as practicable after the cancellation of the registration of a society under this section, the Central Bank shall cause notice thereof to be published in at least 2 daily newspapers published in the State and circulating in the area in which the chief office of the society is situated.

111 Liability of officers of society to penalty where proper accounting records not kept.

111.—(1) If—

• (a) a society that is being wound up and that is unable to pay all of its debts has contravened section 76, and

• (b) the Court considers that such contravention has contributed to the society's inability to pay all of its debts or has resulted in substantial uncertainty as to the assets and liabilities of the society or has substantially impeded the orderly winding up thereof,

every officer of the society who is in default shall be guilty of an offence.

• (2) In a prosecution for an offence under this section it shall be a defence for the person charged to show that—

• (a) he took all reasonable steps to secure compliance by the society with section 76, or

• (b) he had reasonable grounds for believing and did believe that a competent and reliable person, acting under the supervision or control of a director of the society who has been formally allocated such responsibility, was charged with the duty of ensuring that that section was complied with and was in a position to discharge that duty.

112 Personal liability of officers of society where proper accounting records not kept.

112.—(1) Subject to subsection (2), if a society that is being wound up and that is unable to pay all of its debts has contravened section 76, and the Court considers that such contravention has contributed to the society's inability to pay all of its debts or has resulted in substantial uncertainty as to the assets and liabilities of the society or has substantially impeded its orderly winding up the Court, on the application of the liquidator or the Central Bank or any creditor or contributory of the society may, if it thinks it proper to do so, declare that any one or more of the officers and former officers of the society who is or are in default shall be personally liable, without any limitation of liability, for all, or such part as may be specified by the Court, of the debts and other liabilities of the society.

• (2) On the hearing of an application under subsection (1), the person bringing the application may himself give evidence or call witnesses.

• (3)
• (a) Where the Court makes a declaration under subsection (1), it may give such directions as it thinks proper for the purpose of giving effect to the declaration and in particular may make provision for making the liability of any such person under the declaration a charge on any debt or obligation due from the society to him, or on any mortgage or any interest in any mortgage on any assets of the society held by or vested in him or any company or other person on his behalf, or any person claiming as assignee from or through the person liable under the declaration or any company or person acting on his behalf, and may from time to time make such further order as may be necessary for the purpose of enforcing any charge imposed under this subsection.

• (b) In paragraph (a) “assignee” includes any person to whom or in whose favour, by the directions of the person liable, the debt, obligation or mortgage was created, issued or transferred or the interest created, but does not include an assignee for valuable consideration (not including consideration by way of marriage) given in good faith and without notice of any of the matters on the ground of which the declaration is made.

• (4) The Court shall not make a declaration under subsection (1) in respect of a person if it considers that—

• (a) he took all reasonable steps to secure compliance by the society with section 76, or

• (b) he had reasonable grounds for believing and did believe that a competent and reliable person, acting under the supervision or control of a director who has been formally allocated such responsibility, was charged with the duty of ensuring that this section was complied with and was in a position to discharge that duty.

• (5) This section shall have effect notwithstanding that the person concerned may be criminally liable in respect of the matters on the ground of which the declaration is to be made.

• (6) In this section “officer”, in relation to a society, includes a person who has been convicted of an offence under section 90 or 120 in relation to a statement concerning the keeping of proper accounting records by the society.

PART XIII Miscellaneous

113 Financial year of a society.

113.—(1) The financial year of a building society shall be the period of 12 months ending on a 31st day of December.

• (2) The initial financial year of a society shall be such period as expires with the end of the calendar year in which it is formed and the final financial year of a society shall be such shorter period than 12 months as expires with the date to which the society makes up its final accounts.

114 Liability of officer.

114.—(1) Any provision (whether contained in the rules of a building society or in any contract with a society or otherwise) for exempting an officer or auditor of a society from, or indemnifying him against, any liability which by virtue of any rule of law would otherwise attach to him in respect of any negligence, default, breach of duty or breach of trust of which he may be guilty in relation to the society shall, subject to subsection (2), be void.

• (2) A society may indemnify such officer or auditor against any liability incurred by him in defending proceedings, whether civil or criminal, in which judgment is given in his favour or in which he is acquitted, or in connection with any application under section 115 in which relief is granted to him.

115 Court's power to grant relief to an officer of a society.

115.—(1) Where in any proceedings for negligence, default, breach of duty or breach of trust against an officer or auditor of a building society it appears to the court hearing the case that that officer or auditor is or may be liable in respect of the negligence, default, breach of duty or breach of trust, but that he acted honestly and reasonably and that, having regard to all the circumstances of the case (including those connected with his appointment), he ought fairly to be excused for the negligence, default, breach of duty or breach of trust that court may relieve him (either wholly or partly) from his liability on such terms as the court may think fit.

• (2) Where an officer or auditor of a society has reason to apprehend that any claim will or might be made against him in respect of any negligence, default, breach of duty or breach of trust, he may apply to the Court for relief, and the Court on any such application shall have the same power to relieve him as it would have had under this section if it had been a court before which proceedings against that person for such negligence, default, breach of duty or breach of trust had been brought.

• (3) Where any case to which subsection (1) applies is being tried by a judge with a jury, the judge, after hearing the evidence, may, if he is satisfied that the defendant ought under that subsection to be relieved either in whole or in part from the liability sought to be enforced against him, withdraw the case in whole or in part from the jury and direct judgment to be entered for the defendant on such terms as to costs or otherwise as the judge may think proper.

116 Provisions as to evidence.