Cap. 376 Art. 17Power of the competent authority to take control of financial institutions.

(1) If, whether from any report made under article 14 or

15 or otherwise, it appears to the competent authority that any of the circumstances indicated in article 6(1) apply, the competent authority may, without prejudice to the powers of the said authority to impose restrictions, or to withdraw or suspend a licence or a registration under the provisions of article 6(1):

(a) require the financial institution forthwith to take such steps as the competent authority may consider necessary to remedy or rectify the matter;

(b) appoint a competent person to advise the financial institution in the proper conduct of its business;

(c) appoint a competent person to take charge of the assets of the financial institution or any portion of them for the purpose of safeguarding the interests of the integrity of the financial system in Malta;

(d) appoint a competent person to take over the business of the financial institution, either to carry on that business, or to carry out such other function or functions in respect of such business or part thereof, as the competent authority may direct;

(e) require the financial institution to wind up its business or to wind up its business in Malta;

(f) appoint a competent person to act as liquidator for the purpose of winding up the affairs of the financial institution; and, or

(g) determine the remuneration to be paid by the financial institution to any competent person appointed under this sub-article.

(2) Upon receipt of a report or information otherwise received as is mentioned in sub-article (1), the competent authority shall inform the Central Bank.

(3) Where a competent person is appointed by the competent authority:

(a) under sub-article (1)(b), the financial institution shall act in accordance with the advice given by such person, unless and until the competent authority otherwise directs;

(b) under sub-article (1)(c), the financial institution shall deliver to such person all the assets of which he is placed in charge, and all the powers, functions and duties of the financial institution in respect of those assets, whether exercisable by the company in the general meeting or by the board of directors, or by any other person, including the legal and judicial representation of the financial institution, shall be exercisable by and vested in him to the exclusion of the financial institution; and, or

(c) under sub-article (1)(d), the financial institution shall submit its business to the control of such person and shall provide him with such facilities as he may require in order to carry on that business, or to carry out the functions assigned to him under that paragraph, and all the powers, functions and duties of the financial institution, whether exercisable by the company in the general meeting or by the board of directors, or by any other person, including the legal and judicial representation of the financial institution in all matters shall be exercisable by and vested in him, to the exclusion of any other person.

(4) Where a person is appointed under sub-article (1)(c) or (d):

(a) any function, power or duty exercisable by any other person, including the curator of a bankrupt, or any other person appointed by or under any other law and relating to any assets or business of which the person appointed under either of the paragraphs aforesaid is placed in charge or in control, shall unless or until the competent authority otherwise directs, or an express provision of the law specifically provides otherwise, cease to be so exercisable;

(b) the person appointed under either of the paragraphs aforesaid shall in respect of such property, partnerships, firms or other business as the competent authority may specify, and in which the financial institution has an interest, whether directly or indirectly, including any interest arising from advances or loans made, or credit facilities given, or any liability undertaken, have such powers, functions and duties, including legal and judicial representation, as the competent authority may direct, and any such power, function or duty shall be exercisable by and vested in such person, to the exclusion of any other person:

Provided that:

(i) the competent authority shall have the power to direct that all or any of the powers, functions or duties aforesaid should be exercisable by any other person, and in any such case, with effect from such date or dates as the competent authority may specify and unless and until the competent authority otherwise directs, the powers, functions and duties to which the direction of the competent authority applies shall be exercisable by and vested in such other person appointed for the purpose, to the exclusion of all others;

(ii) where the competent authority is of the opinion that the financial institution has ceased to have any interest as aforesaid, it shall direct that any powers, functions and duties exercisable under this paragraph shall cease to be so exercisable, but any such direction shall not affect anything done, or omitted to be done by virtue or by reason of any of the aforesaid powers, functions or duties;

(iii) the person appointed under either of the paragraphs aforesaid shall have the power to require any other person to provide him with such facilities as he may deem necessary to carry out any of the powers, functions or duties under this article;

(iv) the provision of law relating to bankruptcy and in particular Part III of the Commercial Code shall cease to apply to, and shall cease to operate in respect of any property, partnership, firm or other business specified by the competent authority under paragraph (b), unless and until, or except to the extent that the competent authority otherwise directs; and in any such case the person appointed as aforesaid shall, subject to any directions of the competent authority given in the interest of the creditors, act as if those provisions did not exist and as if any declaration of bankruptcy had not been made;

(v) any person appointed by the competent authority under any of the provisions of this article shall submit six monthly reports of his activities and annual accounts of all transactions carried out by him in the performance of his functions, audited by an independent auditor, to the Minister who will place such reports and accounts on the Table of the House of Representatives within fifteen days.

(5) Where a person is appointed under sub-article (1)(f), such person shall be the liquidator of the company for all purposes of law to the exclusion of any other person.

(6) The provisions of this article shall have effect notwithstanding any other provision of any enactment, and notwithstanding any deed, contract, instrument or other document whatsoever.

(7) The foregoing provisions of this article vesting exclusive powers of representation in a person appointed by the competent authority thereunder shall apply also to any act or proceedings commenced or instituted before such representation is vested as aforesaid, and in respect of any such act or proceedings, any other person acting or purporting to act, or in respect of whom action is taken in that capacity shall cease to be a party to and shall be excluded from any such act or proceedings.

(8) No person shall in any way obstruct a person appointed under sub-article (1) in the performance of any of his functions, powers or duties under this article. ACCOUNTING, STATUTORY AUDIT AND AUDITORS