FIRST SCHEDULE
LIQUIDATION OF CO-OPERATIVE SOCIETIES
1.Interpretation: this Schedule(1)In this Schedule—"contributory", in relation to a cooperative society in respect of which a liquidator is appointed, means a member or past member of the society in respect of whom the liquidator has made a determination that the member or past member is liable to make a contribution to the funds of the society;"deliver", in relation to documents or other property, includes surrender and transfer;"inability to pay its debts", in relation to a co-operative society, has the meaning given by paragraph 2;"past member" includes a deceased member.2.The circumstances in which co-operative society is unable to pay its debts(1)For the purposes of this Schedule, a co-operative society is unable to pay its debts—(a)if a creditor (by assignment or otherwise) to whom the society is indebted for hundred thousand shillings or more has served on the society, by leaving it at the society's registered office, a written demand requiring the society to pay the debt and the society has for twenty-one days afterwards failed to pay the debt or to secure or compound for it to the reasonable satisfaction of the creditor;(b)if execution or other process issued on a judgment, decree or order of any court in favour of a creditor of the society is returned unsatisfied in whole or in part; or(c)if it is proved to the satisfaction of the High Court that the society is unable to pay its debts as they fall due.(2)A co-operative society is also unable to pay its debts for the purposes of this Schedule if it is proved to the satisfaction of the High Court that the value of the society's assets is less than the amount of its liabilities (including its contingent and prospective liabilities).(3)The regulations may increase or reduce the amount specified in subparagraph (1)(a).3.Dispositions of property by co-operative society after commencement of liquidation to be void unless the High Court otherwise ordersAfter the Commissioner has cancelled the registration of a co-operative society under section 61 or 62—(a)any disposition of the society's property; and(b)any transfer of shares, or alteration in the status of the society's members,made after the cancellation is void, unless the High Court otherwise orders.4.Attachments and other forms of execution against co-operative society in liquidation to be voidAfter the registration of a co-operative society is cancelled under section 61 or 62, any attachment, sequestration, distress or execution instigated against the assets of the society is void.5.Liquidator may require co-operative society to submit statement of affairs(1)When a liquidator is appointed in respect of a co-operative society, the liquidator may require some or all of the persons to whom this paragraph applies to make out and submit to the liquidator a statement concerning the affairs of the society.(2)The persons required to submit such a statement shall verify it by statutory declaration and shall include in it—(a)such particulars of the society's assets, debts and liabilities as are prescribed by the regulations for the purposes of this paragraph;(b)the names and addresses of the society creditors;(c)the securities (if any) held by them respectively;(d)the dates when the securities were respectively given; and(e)such further or other information as the liquidator may reasonably require.(3)This paragraph applies to the following persons:(a)those who are or have been officers of the society;(b)those who have taken part in the formation of the society at any time during the twelve months before the cancellation of the society's registration;(c)those who—(i) are in the society's employment, or have been in its employment during that period; and(ii) are in the liquidator's opinion capable of giving the information required.(4)A prescribed person who is required under this paragraph to submit a statement of affairs to the liquidator shall subject to subparagraph (5) do so within twenty-one days from and including the date on which notice of the requirement was given to the person by the liquidator.(5)The liquidator may(a)at any time release a person from an obligation imposed on the person under subparagraph (1) or by subparagraph (2); or(b)either when giving the notice referred to in subparagraph (4) or subsequently extend the period referred to in that subparagraph.(6)If the liquidator has declined to exercise a power conferred by subparagraph (5), the High Court may, on the application of the Attorney-General or a person who is dissatisfied with the liquidator's decision, exercise the power if it considers it appropriate to do so.(7)A person who, without reasonable excuse, fails to comply with an obligation imposed by or under this paragraph commits an offence and on conviction is liable to a fine not exceeding five hundred thousand shillings.(8)If, after being convicted of an offence under subparagraph (8), a person, without reasonable excuse, continues to fail to comply with the relevant obligation, the person commits a further offence on each day on which the failure continues and on conviction is liable to a fine not exceeding fifty thousand shillings for each such offence.(9)In this paragraph, "employment" includes employment under a contract for services.6.Duty of Commissioner to conduct investigation into failure of co-operative societyAs soon as practicable after cancelling the registration of a co-operative society, the Commissioner shall conduct an investigation(a)if the society has failed to discover why the society failed; and(b)generally, to investigate the promotion, formation, business, dealings and affairs of the society.7.Public examination of officers and past officers of co-operative society(1)When a liquidator is appointed in respect of a co-operative society, the liquidator may apply to the High Court for the public examination of any person who—(a)is or has been an officer of the society;(b)has acted as provisional liquidator, liquidator or administrator of the society; or(c)not being a person referred to in paragraph (a) or (b) is or has been concerned, or has taken part, in the promotion, formation or management of the society.(2)Unless the High Court otherwise orders, the liquidator shall make an application under subparagraph (1) on receiving a written request to do so from(a)creditors of the society holding not less than one-half in value of the total amount of the society's debts; or(b)contributories of the society holding not less than three-quarters of the voting rights at general meetings of the society.(3)If, on the hearing of an application made under subparagraph (1), the High Court is satisfied that a public examination of the person to whom the application relates is warranted, it shall make an order directing such an examination to be held on a date and at a time and place specified in the order.(4)On being served with a copy of an order made under subparagraph (3), the person concerned shall attend on the date and at the time and place specified in the order and be publicly examined(a)about the promotion, formation or management of the society; or(b)about the conduct of its affairs, or conduct or dealings in relation to the society.(5)The persons specified in subparagraph (6) may—(a)participate in the public examination of a person under this paragraph; and(b)may question the person concerning the matters referred to in subparagraph (4).(6)The following persons are specified for the purpose of subparagraph (5):(b)the liquidator of the society;(c)any person who has been appointed as special manager of the society's property or business;(d)any creditor of the society who has submitted a proof;(e)any contributory of the society.8.Consequences of failing to attend public examination(1)A person who,without reasonable excuse, fails at any time to attend the person's public examination under paragraph 7 is guilty of a contempt of Court and is liable to be punished accordingly (in addition to any other punishment to which the person may be subject).(2)If a person fails without reasonable excuse to attend the person's examination under paragraph 7, or there are reasonable grounds for believing that a person has absconded, or is about to abscond, with a view to avoiding or delaying the examination, the High Court may issue a warrant to be issued to a police officer or a prescribed officer of that Court(a)for the arrest of that person; and(b)for the seizure of any documents or property in that person's possession.(3)In such a case, the High Court may authorise the person arrested under the warrant to be detained in custody, and anything seized under it to be kept, in accordance with the directions of that Court, until such time as that Court orders.9.Power of the High Court to halt liquidation(1)When a liquidator is appointed in respect of a co-operative society, the liquidator, the Commissioner or any creditor or contributory of the society, and on proof to the satisfaction of the High Court that all proceedings in the liquidation ought to be halted, that Court may make an order halting the liquidation proceedings, either permanently or for a specified period, on such terms as that Court considers appropriate.(2)Before making an order under subparagraph (1), the High Court may require the liquidator to provide it with a report on any facts or matters that appear to the liquidator to be relevant to the application.(3)The liquidator shall comply with such a requirement within such period as the High Court specifies.10.Payment of expenses of liquidation.(1)If, in the case of a co-operative society in respect of which a liquidator is appointed, the assets of the society are insufficient to satisfy its liabilities, the liquidator—(a)may direct the expenses incurred in the liquidation to be paid out of the society's assets; and(b)may direct that that payment be given such of priority as the liquidator considers appropriate.(2)A direction under subparagraph (1) has effect irrespective of the provisions of this Act relating to preferential debts.11.Power to arrest absconding contributory(1)This paragraph applies when he Commissioner has cancelled the registration of a co-operative society.(2)On the application of the Commissioner made either before or after the registration of the society is cancelled, the High Court may, if satisfied on reasonable grounds that a contributory is—(a)about to quit Kenya or otherwise to abscond; or(b)has concealed or removed, or is about to conceal or remove, any of the contributory's property for the purpose of evading payment of calls,issue a warrant authorising the contributory to be arrested and the contributory's documents and moveable personal property to be seized.(2)In such a case, the High Court may authorise the person arrested under the warrant to be detained in custody, and anything seized under the warrant to be kept, in accordance with the directions of the High Court, until such time as that Court orders.12.Preferential debts (general provision)(1)The liquidator of a co-operative society shall distribute the assets of the society available for the payment of creditors in accordance with the Second Schedule.(2)Subparagraph (1) is subject to the provisions of this Schedule.13.Preferential charge on property of co-operative society distrained within three months before appointment of iquidator(1)This paragraph applies to a co-operative society in respect of which a liquidator is appointed.(2)If a person (whether or not a landlord or person entitled to rent) has distrained on the property of the society during the three months immediately preceding the date on which a liquidator was been appointed, that property, or the proceeds of its sale, is charged for the benefit of the society with the preferential debts of the society to the extent that the society's assets are for the time being insufficient to satisfy them.(3)If, because of a charge under subparagraph (2), a person surrenders property to the society or pays money to the society, the person ranks, in respect of the amount of the proceeds of sale of the property by the liquidator, or the amount money paid, as a preferential creditor of society, except as against so much of the society's property as is available for the payment of preferential creditors because of the surrender or payment.(4)This paragraph does not limit the effect of paragraph 4 (avoidance of attachments, etc.).14.Expenses of liquidation to have priority over claims under floating(1)The expenses of liquidating a co-operative society, so far as the assets of the society available for payment of general creditors are insufficient to meet those expenses, have priority over any claims to property comprised in or subject to any floating charge created by the society and are to be paid out of any such property accordingly.(2)In subparagraph (1), the reference to claims to property comprised in or subject to a floating charge is to the claims of—(a)the holders of debentures secured by, or holders of, the floating charge; and(b)any preferential creditors entitled to be paid out of that property in priority to them.(3)Provision may be made restricting the application of subparagraph (1), in such circumstances as may be prescribed by the regulations, to expenses authorised or approved—(a)by the holders of debentures secured by, or holders of, the floating charge and by any preferential creditors entitled to be paid in priority to them; or(4)References in this paragraph to the expenses of the liquidation are to all expenses properly incurred in the liquidation, including the remuneration of the liquidator.15.Power of liquidator to disclaim onerous property(1)The liquidator of a co-operative society may, by the giving such notice as may be prescribed by the regulations, disclaim any onerous property and may do so even if the liquidator has taken control of it, tries to sell it, or otherwise exercised rights of ownership in relation to it.(2)The following is onerous property for the purposes of this paragraph:(a)an unprofitable contract;(b)other property of the society that is unsalable or not readily saleable or is such that it may give rise to a liability to pay money or perform any other onerous act.(3)A disclaimer under this paragraph—(a)operates so as to determine, as from the date of the disclaimer, the rights, interests and liabilities of the society in or in respect of the property disclaimed; but(b)does not, except so far as is necessary for the purpose of releasing the society from any liability, affect the rights or liabilities of any other person.(4)A notice of disclaimer may not be given under this paragraph in respect of any property if—(a)a person interested in the property has applied in writing to the liquidator, or a predecessor of the liquidator, requiring the liquidator or liquidator's predecessor to decide whether the property will be disclaimed or not; and(b)twenty-eight days from and including the date on which that application was made (or such extended period as the High Court may allow) has expired without a notice of disclaimer having been given under this paragraph in respect of the property.(5)A person who has sustained loss or damage in consequence of the operation of a disclaimer under this paragraph is a creditor of the society to the extent of the loss or damage and accordingly may prove for the loss or damage in the liquidation.16.Special provisions relating to disclaimer of leaseholds(1)The disclaimer under paragraph 15 of any property comprising a leasehold interest does not take effect unless a copy of the disclaimer has been served (so far as the liquidator is aware of their addresses) on every person claiming under the society as under-lessee or mortgagee and either—(a)an application under paragraph 18 (general powers of the High Court in respect of disclaimed property) has not been made with respect to that property within fourteen days from and including the date on which the last notice served under this subparagraph was served; or(b)if such an application is made that Court makes an order directing the disclaimer to take effect.(2)If the High Court makes an order under subparagraph (1)(b) it may also, instead of or in addition to any order it makes under paragraph 18, make such orders with respect to fixtures, tenant's improvements and other matters arising out of the lease as it considers appropriate.17.Effect of disclaimer in relation to land subject to rentcharge(1)If, as a result of the disclaimer under paragraph 15 of land subject to a rentcharge, the land vests by operation of law in a person, the person is not subject to any liability in respect of amounts becoming due under the rentcharge except amounts that become due after the proprietor (or some person claiming under or through the proprietor) has taken possession or control of the land or has occupied it.(2)The reference in subparagraph (1) to a person includes the State and to any a successor in title to the person.18.General powers of the High Court in respect of disclaimed property(1)This paragraph and paragraph 19 apply to property that the liquidator of a co-operative society has disclaimed in accordance with paragraph 15.(2)An application to the High Court for an order under subparagraph (3) may be made by—(a)any person who claims an interest in the disclaimed property; or(b)any person who is under a liability in respect of the disclaimed property, other than a liability discharged by the disclaimer.(3)On the hearing of an application made under subparagraph (2), the High Court may make an order, on such terms as it considers appropriate, for the vesting of the disclaimed property in, or for its delivery—(a)a person entitled to it or a trustee for such a person; or(b)a person subject to such a liability as is referred to in subparagraph (2)(b) or a trustee for such a person.(4)The High Court may make an order under subparagraph (3)(b) only if it appears to that Court that it would be just to do so for the purpose of compensating person subject to the liability in respect of the disclaimer.(5)The effect of an order made under this paragraph is to be taken into account in assessing for the purpose of paragraph 15(6) the extent of any loss or damage sustained by a person in consequence of the disclaimer.(6)It is not necessary for an order under this paragraph vesting property in a person to be completed by transfer.19.Powers of the High Court in respect of leaseholds held by co-operative society in liquidation(1)The High Court may not make an order under paragraph 18 vesting a leasehold interest in a person claiming under the society as underlessee or mortgagee except on terms making the person—(a)subject to the same liabilities and obligations as the society was subject to under the lease at the time of the liquidator's appointment; or(b)if that Court considers appropriate subject to the same liabilities and obligations as the person would be subject to if the lease had been assigned to the person at that time.(2)For the purposes of an order under paragraph 18 relating only to the part of the property comprising a lease, the requirements of subparagraph (1) apply as if the lease was the only property to which the order relates.(3)If subparagraph (1) applies and no person claiming under the society as underlessee or mortgagee is willing to accept an order under paragraph 18 on the terms required under that subparagraph, the High Court may make an order vesting the society's interest in the lease in any person who is liable (whether personally or in a representative capacity, and whether alone or jointly with the society) to perform the lessee's covenants under the lease.(4)The High Court may vest that estate and interest in such a person freed and discharged from all estates, encumbrances and interests created by the society.(5)If subparagraph (1) applies and a person claiming under the society as underlessee or mortgagee declines to accept an order under paragraph 18, that person is excluded from all interest in the property.20.Creditor not entitled to retain benefit of execution or attachment against liquidator unless creditor completes execution or attachment before commencement of liquidation(1)If—(a)a creditor—(i)has issued execution against the property of a co-operative society; or(ii)has attached any debt due to it; and(b)a liquidator is subsequently appointed in respect of the society,the creditor is not entitled to retain the benefit of the execution or attachment against the liquidator unless the creditor has completed the execution or attachment before the commencement of the liquidation.(2)However(a)a person who, under a sale conducted by the enforcement officer or other officer charged with the execution of the writ goods of a co-operative society on which execution has been levied, purchases the goods in good faith acquires a good title to them as against the liquidator; and(b)the High Court may set aside the rights conferred on the liquidator by subparagraph (1) in favour of the creditor to such extent and subject to such terms as it considers just.(3)For purposes of this Act—(a)an execution against goods is completed by seizure and sale;(b)an attachment of a debt is completed by receipt of the debt;and(c)an execution against land is completed by its seizure or by any other event prescribed by the regulations for the purposes of this paragraph.21.Duties of judicial enforcement officers charged with execution of writs and other processes involving co-operative societies in liquidation(1)This paragraph applies if—(a)a co-operative society's goods are taken in execution; and(b)before their sale or the completion of the execution (whether by the receipt or recovery of the full amount of the levy) notice is served on the judicial enforcement officer charged with execution of the writ or other process that a liquidator has been appointed in respect of the society.(2)If so required, the judicial enforcement officer concerned shall deliver the goods and any money seized or received in part satisfaction of the execution to the liquidator.(3)However, the costs of execution are a first charge on the goods or money so delivered, and the liquidator may sell the goods, or a sufficient part of them for the purpose of satisfying the charge.(4)If, under an execution in respect of a judgement for an amount exceeding fifty thousand shillings, a co-operative society's goods are sold or money is paid in order to avoid sale, the judicial enforcement shall—(a)deduct the costs of the execution from the proceeds of sale or the money paid; and(b)retain the balance for not less than fourteen days.(5)If, within that fourteen-day period—(a)notice is served on the judicial enforcement officer to the effect that—(i)an application for the liquidation of the society has been made; or(ii)a meeting has been convened at which there is to be proposed a resolution for voluntary liquidation; and(b)an order is made or a resolution passed, that officer shall pay the balance to the liquidator, who is entitled to retain, it as against the execution creditor.(6)The rights conferred by this paragraph on the liquidator may be set aside by the High Court in favour of the creditor to such extent and subject to such terms as that Court considers appropriate.(7)The regulations may provide for the amount specified in subparagraph (4) to be increased or reduced.22.Power of the High Court to rescind contracts entered into by co-operative society in respect of which liquidator is appointed(1)A person who is, as against the liquidator of a co-operative society, entitled to the benefit or subject to the burden of a contract made with the society, may make an application for an order under subparagraph (2).(2)On the hearing of an application made under subparagraph (1), the High Court may make an order rescinding the contract on such terms as to payment by or to either party of damages for the non-performance of the contract, or otherwise, as that Court considers appropriate.(3)Damages payable to a person under the order are provable by the person as a debt in the liquidation.23.Co-operative society in liquidation required to state that it is in liquidation in all invoices, letters and other communications(1)A co-operative society in respect of which a liquidator is appointed shall ensure that—(a)every invoice, order for goods or services, business letter or order form (whether in hard copy, electronic or any other form) issued by or on behalf of the society, or a liquidator, of the society or a receiver or manager of the society's property; and(b)each of the society's websites, states that the society is in liquidation.(2)If the society fails to comply with a requirement under subparagraph (1), the society, and each officer of the society who is in default, commit an offence and on conviction are each liable to a fine not exceeding five hundred thousand shillings.(3)If, after a co-operative society or any of its officers is convicted of an offence under subparagraph (2), the society continues to fail to comply with the relevant requirement, the society, and each officer of the society who is in default, commits a further offence on each day on which the failure continues and on conviction is liable to a fine not exceeding fifty thousand shillings for each such offence.24.Interest on debts to be paid if surplus permits(1)When a liquidator is appointed in respect of a co-operative society, interest is payable in accordance with this paragraph on any debt proved in the liquidation of the society's assets, including so much of any such debt as represents interest on the remainder.(2)The liquidator shall, before applying any surplus remaining after the payment of the debts proved in the liquidation for any other purpose, apply the surplus in paying interest on those debts in respect of the periods during which they have been outstanding since the liquidator was appointed.(3)All interest under this paragraph ranks equally (whether or not the debts on which it is payable rank equally).(4)The rate of interest payable under this paragraph in respect of a debt is the rate for the time being prescribed by the regulations for the purposes of this paragraph.25.Certain documents relating to co-operative society in liquidation to be exempt from stamp dutyWhen a liquidator is appointed in respect of a co-operative society, the following documents are exempt from stamp duty:(a)every transfer relating solely to freehold or leasehold property, or to any interest in, any real or personal property, that forms part of the society's assets and that, after the execution of the transfer, either at law of in equity, is or remains part of those assets; and(b)every writ, order or other document relating solely to the property of the society, or to any proceeding relating to its liquidation.26.Records of co-operative society in liquidation to be evidenceWhen a co-operative society is in liquidation, all records of the society and of the liquidator are evidence of the truth of all matters purporting to be recorded in them, until the contrary is proved.27.Liquidator to lodge periodic statements with Commissioner of Co-operative societies with respect to current position of liquidation(1)If the liquidation of a co-operative society is not completed within twelve months after its commencement, the liquidator shall, at such intervals as may be prescribed by the regulations and until the liquidation is completed, lodge with the Commissioner a statement containing the particulars so prescribed with respect to the proceedings in, and position of, the liquidation.(2)A liquidator who fails to lodge a statement as required by subparagraph (1) commits an offence and on conviction is liable to a fine not exceeding five hundred thousand shillings.(3)If, after being convicted of an offence under subparagraph (2), a liquidator continues to fail to lodge a statement as required by subparagraph (1), the liquidator commits a further offence on each day on which the failure continues and on conviction is liable to a fine not exceeding fifty thousand shillings for each such offence.28.Court may order meetings to be held to ascertain wishes of creditors or contributories(1)The High Court may—(a)as to all matters relating to the liquidation of a co-operative society, have regard to the wishes of the creditors or contributories (as proved to it by any sufficient evidence); and(b)if it considers appropriate, for the purpose of ascertaining those wishes—(i)direct meetings of the creditors or contributories to be convened, held and conducted in such manner as that Court directs; and(ii)appoint a person to act as chairperson of any such meeting and report the result of it to that Court.(2)In the case of creditors, the High Court shall take into account the value of each creditor's debt.(3)In the case of contributories, the High Court shall take into account the number of votes conferred on each contributory.29.Judicial notice to be taken of documents of the High CourtIn all proceedings under this Schedule, all courts and tribunals, all judges and persons acting judicially, and all officers of a court or tribunal, or employed in enforcing the process of a court or tribunal, are required to take judicial notice of—(a)the signature of an officer of the High Court; and(b)the official seal or stamp of that Court affixed to or impressed on any document made, issued or signed under a provision of this Act, or any official copy of such a document.30.Affidavits required to be sworn for purposes of this Schedule(1)An affidavit required to be sworn under or for the purposes of this Schedule may be sworn in Kenya—(a)before any court, tribunal, judge or person lawfully authorised to take and receive affidavits; or(b)before any of any diplomat representing the Government of Kenya in any place outside Kenya.(2)All courts, tribunals, judges and other persons acting judicially are required to take judicial notice of the seal or stamp or signature of any such court, tribunal, judge, person or diplomat affixed to, impressed on, or subscribed to any such affidavit, or to any other document to be used for the purposes of this Schedule.31.Realising property of co-operative society in respect of which a liquidator is appointed(1)This paragraph applies to a co-operative society in respect of which a liquidator is appointed.(2)If a person has control over money, documents or other property to which the society appears to be entitled, the High Court may require that person immediately, or within such period as that Court may direct, to pay the money or deliver the documents or other property documents to the liquidator.(3)Subparagraph (4) applies if the liquidator—(a)seizes or disposes of property that is not property of the society; and(b)at the time of seizure or disposal believes on reasonable grounds that the liquidator is entitled (whether under an order of that Court or otherwise) to seize or dispose of that property.(4)When this subparagraph applies, the liquidator—(a)is not liable to any person in respect of any loss or damage resulting from the seizure or disposal except in so far as that loss or damage is caused by the liquidator's own negligence; and(b)has a lien on the property, or the proceeds of its sale, for such expenses as were incurred in connection with the seizure or disposal.32.Duty of certain persons to co-operate with liquidator(1)When a liquidator is appointed in respect of a co-operative society, this paragraph applies to the following persons—(a)those who are or have at any time been officers of the society;(b)those who have taken part in the formation of the society at any time within the twelve months immediately preceding the effective date;(c)those who are in the employment of the society, or have been in its employment (including employment under a contract for services) within that period, and are in the liquidator's opinion capable of giving the required information;(d)those who are, or have within that period been, officers of, or in the employment of, another co-operative society that is, or within period was, an officer of the relevant co-operative society.(2)A person to whom this paragraph applies shall—(a)give to the liquidator such information concerning the society and its promotion, formation, affairs or property as the liquidator may reasonably require; and(b)appear before the liquidator at such times as the liquidator may reasonably require.(3)A person who, without reasonable excuse, fails to comply with a requirement imposed by this paragraph commits an offence and on conviction is liable to a fine not exceeding five hundred thousand shillings.(4)If, after being convicted of an offence under subparagraph (3), the person continues to fail to comply with the relevant requirement, the person commits a further offence on each day on which the failure continues and on conviction is to fine not exceeding fifty thousand shilling for each such offence.(5)In this paragraph, "employment" includes employment under a contract for services.33.Lien in respect of co-operative society's documents unenforceable if it would deny their possession to Commissioner(1)This paragraph applies to a co-operative society in respect of which a liquidator is appointed.(2)A lien or other right to retain possession of any of the documents of the society is unenforceable to the extent that its enforcement would deny possession of any of the documents to the liquidator.(3)Subparagraph (2) does not apply to a lien on documents that confer a title to property and are held as such.34.Supply of utility services to companies in liquidation or under administration, etc.(1)This paragraph applies to a co-operative society in respect of which a liquidator is appointed.(2)If a request is made by or with the consent of the liquidator for the giving, after the date on which liquidator is appointed, of any of the supplies specified in subparagraph (3), the supplier—(a)may make it a condition of the giving of the supply that the liquidator personally guarantees the payment of any charges in respect of the supply; but(b)may not make it a condition for providing the supply, or take any action that has the effect of making it a condition for providing the supply, that any outstanding charges are to be paid in respect of a supply provided to the society before the effective date.(3)The supplies referred to in subparagraph (2) are—(a)a supply of gas by a gas supplier;(b)a supply of electricity by an electricity supplier;(c)a supply of water by a water supplier; and(d)a supply of communications services by a provider of a public telecommunication or electronic communications service.SECOND SCHEDULE
PREFERENTIAL DEBTS
1.Priority of payments to preferential creditorsThe debts of a co-operative society in respect of which a liquidator is appointed are payable in the order of priority in which they are listed in paragraphs 2, 3 and 4.(1)The expenses of the liquidation have first priority and are payable in the order in which they are listed in subparagraph (2)(a) and (b).(2)For the purposes of subparagraph (1), those expenses are as follows:(a)the remuneration of the liquidator, and the fees and expenses properly incurred by the liquidator in performing out the duties imposed, and exercising the powers conferred, by or under this Act;(b)to any creditor who protects or preserves assets of the society for the benefit of the creditors of the society by the payment of money or the giving of an indemnity—(i)the amount received by the liquidator by the realisation of those assets, up to the value of that creditor's unsecured debt; and(ii)the amount of the costs incurred by that creditor in protecting or preserving those assets.(1)After the claims referred to in paragraph 2 have been paid, claims in respect of the following debts have second priority to the extent that they remain unpaid:(a)all wages or salaries payable to employees in respect of services provided to the society during the four months before the date of appointment of the liquidator;(b)any holiday pay payable to employees on the termination of their employment before that appointment or during the liquidation;(c)any compensation for redundancy owed to employees that accrues before that appointment or during the liquidation;(d)amounts deducted by the society from the wages or salaries of employees in order to satisfy their obligations to other persons (including amounts payable to the Kenya Revenue Authority in accordance with Income Tax Act (Cap. 470);(e)any reimbursement or payment provided for, or ordered by the Employment and Labour Relations Court under the Labour Institutions Act (Cap. 234) to the extent that the reimbursement or payment does not relate to any matter specified in the Labour Relations Act (Cap. 233) in respect of wages or other money or remuneration lost during the four months before that appointment or during the liquidation;(f)all amounts that are by any other written law required to be paid in accordance with the priority established by this subclause paid by the buyer to a seller on account of the purchase price of goods.(2)The total amount to which priority is to be given under any, or all, of subparagraphs (1)(a) to (e) may not, in the case of any one employee, exceed two hundred thousand shillings as at the commencement of the liquidation.(3)The amount specified in subparagraph (2) is subject to adjustment as follows:(a)subject to subclause (d)—the Cabinet Secretary shall, by order published in the Gazette, make an adjustment that has effect for the three-year period from and including 1 July 2015 and for each subsequent three-year period;(b)subject to subclause (d)—the Cabinet Secretary shall make such an order within three months after the end of an adjustment period;(c)each adjustment is required to reflect any overall percentage increase, over the relevant adjustment period, in average weekly earnings (total, private sector), calculated by reference to the last Employment Survey or similar employment index published by Kenya Bureau of Statistics (or, if that survey ceases to be published, a survey certified by the Government Statistician as an equivalent to that survey) within the relevant adjustment period;(d)if, in an adjustment period, there is no change, or an overall decrease, in the percentage movement in average weekly earnings (total, private sector, as so calculated, the Cabinet Secretary may not make an adjustment for that adjustment period;(e)if, in accordance with subclause (d), no adjustment is made, the Cabinet Secretary shall ensure that the next adjustment made for any later adjustment period reflects any overall percentage increase in average weekly earnings (total, private sector) between the date of the last adjustment and the end of the adjustment period for which the subsequent adjustment is to be made;(f)all adjustments are cumulative and are to be rounded to the nearest shilling (with fifty cents being rounded to one shilling); and(g)any correction to the Quarterly Employment Survey on which an adjustment is based is to be disregarded until the adjustment that takes effect in the subsequent adjustment period, which must reflect the corrected information in the calculation of that adjustment and must otherwise be made in accordance with this subparagraph.(4)The amount specified in subparagraph (2), or that amount as adjusted under subparagraph (3), on the date of commencement of the liquidation, continues to apply to that liquidation regardless of any change to that amount that is prescribed after the date of commencement of the liquidation.(5)In this paragraph—"adjustment period" means the three-year period beginning on 1 July 2012 and each subsequent three-year period."employee" means a person employed by an employer for wages or a salary under a contract of service; and includes a home worker specified in of the Employment Act (Cap. 226), but does not include a person who is, or was at any time during the twelve months before the appointment of the liquidator of the society, a member of the committee of the society, or a nominee or relative of, or a trustee for, such a member;"wages or salaries", in relation to an employee, includes—(a)remuneration in the form of commission or payable for time or for piece work; and(b)remuneration payable to an employee as holiday or sickness pay or in respect of absence from work for any other good reason.4.Third priority claimsAfter the claims referred to in paragraphs 2 and 3 have been paid, the claims in respect of the following debts have third priority to the extent that they remain unpaid:(a)tax deductions made by the society under the pay as you earn rules of the Income Tax Act (Cap. 470);(b)non-resident withholding tax deducted by the society under the Income Tax Act (Cap. 470);(c)resident withholding tax deducted by the society under the Income Tax Act (Cap. 470);(d)duty payable within the meaning of the customs laws.5.Unsatisfied claims of the same priority to abate equallyClaims having the same priority rank equally among themselves and, subject to any maximum payment level prescribed by or under any written law, are payable in full, unless the property of the society is insufficient to meet them, in which case they abate in equal proportions.THIRD SCHEDULE
OFFENCES RELATING TO CONDUCT BEFORE AND DURING LIQUIDATION AND CRIMINAL PROCEEDINGS RELATING TO THOSE OFFENCES
1.Offence involving commission of fraudulent acts in anticipation of liquidation(1)This paragraph applies in relation to a co-operative society in respect of which a liquidator is appointed.(2)An officer or past officer of the society commits an offence if, within the twelve months immediately preceding the appointment of the liquidator, the officer or past officer-(a)concealed any part of the society's property to the value of fifty thousand shillings or more; or concealed any debt due to or from the society;(b)fraudulently removed any part of the society's property to the value of fifty thousand shillings or more;(c)concealed, destroyed, mutilated or falsified any document affecting or relating to the society's affairs or property;(d)made any false entry in any document affecting or relating to the society's affairs or property;(e)fraudulently parted with, altered or made any omission in any document affecting or relating to the society's affairs or property; or(f)pawned, pledged or disposed of any property of the society that has been obtained on credit and has not been paid for.(3)Subparagraph (3)(f) does not apply if the pawning, pledging or disposal was done in the ordinary course of the society's business.(4)An officer or past officer of the society also commits offence—(a)if, within the twelve months period referred to in subparagraph (2), the officer or past officer has been privy to the doing by others of any of the acts referred to in clauses (c), (d) and (e) of that subparagraph; or(b)if, at any time after the commencement of the liquidation, the officer or past officer—(i)does any of the acts referred to in clauses (a) to (f) of that subparagraph; or(ii)is privy to the doing by others of any of the acts referred to in clauses (c) to (e) of that subparagraph.(4)In a prosecution for an offence under—(a)clause (a) or (f) of subparagraph (2); or(b)subparagraph (4) in respect of an act referred to in either of those two clauses,it is a defence to prove that the officer or past officer had no intention to defraud.(5)In a prosecution for an offence under—(a)clause (c) or (d) of subparagraph (2); or(b)subparagraph (4) in respect of an act referred to in either of those two clauses,it is a defence to prove that the officer or past officer had no intention to conceal the state of affairs of the society or to defeat the law.(6)If property is pawned, pledged or disposed of in circumstances that constitute an offence under subparagraph (2)(f), a person who takes in pawn or pledge, or otherwise receives, the property knowing it to have been pawned, pledged or disposed of in such circumstances, commits an offence.(7)A person found guilty of an offence under this paragraph is liable on conviction to a fine not exceeding two million shillings or to imprisonment for a term not exceeding five years, or to both.(8)The regulations may increase or reduce the amounts specified in subparagraph (2)(a) and (b).2.Offences involving transactions to defraud creditors of co-operative society in respect of which a liquidator is appointed(1)This paragraph applies in relation to a co-operative society in respect of which a liquidator is appointed.(2)An officer or past officer of the society commits an offence if the officer or past officer—(a)has made or caused to be made a gift or transfer of, or charge on, or has caused or connived at the levying of execution against, the society's property; or(b)has concealed or removed any part of the society's property since, or within the two months preceding, the date of any unsatisfied judgment or order for the payment of money obtained against the society.(3)A person is not liable to be charged with an offence under subparagraph (2) if the conduct alleged to constitute the offence occurred more than five years before the commencement ofthe liquidation.(4)In a prosecution for an offence under subparagraph (2)(a), it is a defence to prove that the officer or past officer did not, at the time of the alleged offence, have any intent to defraud the society's creditors.(5)An officer or past officer of cooperative society who is found guilty of an offence under this paragraph is liable on conviction to a fine not exceeding one million shillings or to imprisonment or a fine not exceeding two years, or to both.3.Offence involving misconduct commited in course of liquidation of co-operative society(1)This paragraph applies in relation to a co-operative society for which a liquidator is appointed.(2)An officer or past officer of the society commits an offence if the officer or past officer—(a)does not to the best of the officer's or past officer's knowledge and belief fully and truly disclose to the liquidator all of the society's property, and how and to whom and for what consideration and when the society disposed of any part of that property (except such part as has been disposed of in the ordinary course of the society's business);(b)does not deliver up to the liquidator, or in accordance with the directions of the liquidator, all such part of the society's property as is under the control of the officer or past officer, and that the liquidator is required by law to deliver up;(c)fails to deliver up to the liquidator (or as the liquidator directs) all documents under the control of the officer or past officer that belong to the society and that the officer or past officer is required by law to deliver up;(d)knowing or believing that a false debt has been proved by any person liquidator of that knowledge or belief as soon as practicable; or(e)after the appointment of the liquidator—prevents the production of any document affecting or relating to the society's affairs or property.(3)An officer or past officer also commits an offence if, after the liquidator is appointed, the officer or past officer attempts to account for any part of the society's property by means of fictitious losses or expenses.(4)An officer or past officer is presumed, in the absence of evidence to the contrary, to have committed an offence under subparagraph (3) if the officer or past officer has made an attempt of the kind referred to in that subparagraph at a meeting of the society's creditors held within the twelve months immediately preceding the appointment of the liquidator.(5)In a prosecution for an offence under subparagraph (2)(a), (b) or (c), it is a defence to prove that the officer or past officer had no intention to defraud.(6)In a prosecution for an offence under subparagraph (2)(e), it is a defence to4.Offence to falsify documents in relation to co-operative society in respect of which liquidator is appointed(1)This paragraph applies in relation to a co-operative society in respect Of which a liquidator is appointed.(2)An officer or contributory of the society commits an offence if, during the liquidation, the officer or contributory, with intent to defraud or deceive the society or any other person—(a)destroys, damages, alters or falsifies a security or other document of the society; or(b)makes or is privy to the making of a false or fraudulent entry in any record or other document of the society.(3)A person who is found guilty of an offence under subparagraph (1) is liable on conviction to a fine not exceeding two million shillings or to imprisonment for a term not exceeding five years, to both.5.Offence to make material omission from statement relating to affairs of co-operative society in respect which liquidator is appointed(1)This paragraph applies to a co-operative society in respect of which a liquidator is appointed.(2)An officer or past officer of the society commits an offence if, while the liquidator is appointed, the officer or past officer makes a material omission from a statement relating to the society's affairs.(3)An officer or past officer of the society is also taken to have committed an offence under subparagraph (2) if, before the appointment of the liquidator, the officer or past officer has made any material omission from a statement relating to the society's affairs.(4)In a prosecution for an offence under this paragraph, it is a defence to prove that the officer or past officer had no intention to defraud.(5)A person who is found guilty of an offence under this paragraph is liable on conviction to a fine not exceeding one million shillings or to imprisonment for twelve months, or to both.6.Offence to make false representations to creditors of co-operative society in respect of which a liquidator is appointed(1)This paragraph applies to a co-operative society in respect of which a liquidator is appointed.(2)An officer or past officer of the society commits an offence if—(a)the officer or past officer makes a false representation; or(b)does any other fraudulent act,for the purpose of obtaining the consent of the society's creditors or any of them to an agreement relating to the society's -affairs or to its liquidation.(3)An officer or past officer of the society is also to be taken to have committed an offence under subparagraph (2) if, before the commencement of the liquidation, the officer or past officer—(a)made any false representation; or(b)did any other fraudulent act, for the purpose of obtaining that consent.(4)An officer or past officer person who is found guilty of an offence under this paragraph is liable on conviction to a fine not exceeding two million shillings and to imprisonment for a term not exceeding five years, or to both.7.Power of the High Court to make orders against delinquent committee members, liquidators, etc.(1)This paragraph applies to the following persons:(a)an officer or past officer of a cooperative society that is in liquidation (whether by the High Court or voluntarily);(b)a person who is or has acted as the liquidator of such a co-operative society;(c)not being a person referred to in paragraph (a) or (b)—a person who has been concerned in the promotion, formation or management of such a co-operative society.(2)If, during the course of the liquidation of a co-operative society, it appears that a person to whom this paragraph applies has or may have—(a)misapplied or retained, or become accountable for, money or property of the society; or(b)committed misfeasance or a breach of any fiduciary or other duty in relation to the society,the Commissioner, the liquidator of the society or a creditor or contributory of the society may make an application to that Court to conduct an examination under subparagraph (6).(3)The reference in subparagraph (2) to misfeasance or a breach of any fiduciary or other duty in relation to the society includes, in the case of a person who has acted as liquidator of the society, any misfeasance or breach of any fiduciary or other duty in connection with the carrying out of the liquidator's functions as liquidator of the society.(4)An application under subparagraph (2) may be made in relation to a person who has acted as liquidator of the society only with the leave of the High Court given after the person has been released from the responsibilities of liquidator.(5)A contributory may make an application under subparagraph (2) only with the leave of the High Court.(6)On the hearing of an application made under subparagraph (2), the High Court may undertake an examination into the conduct of the person in relation to whom the application was made.(7)If, at the conclusion of the examination, the High Court finds that the person examined has engaged in conduct of a kind referred to in subparagraph (2), it may make an order compelling the person—(a)to repay, restore or account for the money or property or any part of it, with interest at such rate as that Court considers appropriate; or(b)to contribute such amount to the society's assets as compensation for the misfeasance, breach of fiduciary or other duty as the High Court considers fair and reasonable.8.Power of the High Court to make orders against officers of co-operative society and others found to have participated in fraudulent trading by co-operative society(1)A liquidator of a co-operative society may make an application to the High Court for an order under subparagraph (2) if—(a)in the course of the liquidation of the society, the liquidator forms the view that a business of the society has been carried on with intent to defraud creditors of the society or creditors of any other person, or for any fraudulent purpose; and(b)the liquidator believes that specified persons participated (directly or indirectly) in the business with the knowledge that the business was being carried on in that manner.(2)If, on hearing an application made under subparagraph (1), the High Court finds that the persons specified in the application did in fact participate (directly or indirectly) in a business of the society with the knowledge that it was being carried on in the manner referred to in subparagraph (1)(a), it may order those persons (or any of them) to make such contributions to the society's assets as the High Court considers fair and reasonable.(3)The persons specified in an application made under subparagraph (2) are entitled to be served with a copy of the application and to appear and be heard as respondents at the hearing of the application,(4)If the High Court makes an order against a person under subparagraph (2), it may also make an order disqualifying the person from—(a)being or acting as a member of the committee of a co-operative society;(b)being or acting as a liquidator, provisional liquidator or administrator of a co-operative society;(c)being or acting as a supervisor of a voluntary arrangement approved by the society; or(d)in any way (whether directly or indirectly) being concerned in the promotion, formation or management of a co-operative society,for such period, not exceeding fifteen years, as may be specified in the order.9.Power of the High Court to make orders against officers of co-operative society engaging in wrongful trading(1)This paragraph applies(a)to a co-operative society in respect of which a liquidator is appointed; and(b)to a person who, at a time before the liquidator was appointed, was an officer of the society.(2)For the purposes of this paragraph—(a)a co-operative society is in insolvent liquidation if, at the time the liquidation commences, its assets are insufficient for the payment of its debts and other liabilities and the expenses of the liquidation; and(b)the person in respect of whom an application is made under subparagraph (3) is the respondent to the application.(3)If, in the course of the liquidation of a co-operative society, it appears to the liquidator that a person to whom this paragraph applies knew or ought to have known that there was no reasonable prospect that the society would avoid being placed in insolvent liquidation, the liquidator may make an application to the High Court for an order under subparagraph (5).(4)The High Court may hear an application made under subparagraph (2) only if the person in respect of whom the application was made has been served with a copy of the application.(5)If, on the hearing of an application made under subparagraph (3), the High Court may, if satisfied that, at the relevant time, the respondent knew or ought to have known that there was no reasonable prospect that the society would avoid being placed in insolvent liquidation, make an order declaring the respondent to be liable to make such contribution (if any) to the society's assets as that Court considers appropriate.(6)However, the High Court may not make such an order if satisfied that the respondent took such steps to avoid potential loss to the society's creditors as (assuming the respondent to have known that there was no reasonable prospect that the society would avoid going into solvent liquidation) the respondent ought reasonably to have taken.(7)Nothing in this paragraph affects the operation of paragraph 8 (fraudulent trading by co-operative society in liquidation).(8)If the High Court makes an order against a person under subparagraph (5), it may also make an order disqualifying theperson from—(a)being or acting as a member of the committee of a co-operative society or a director of a company;(b)being or acting as a liquidator, provisional liquidator or administrator of a co-operative society;(c)being or acting as a supervisor of a voluntary arrangement approved by the society; or(d)in any way, whether directly or indirectly, being concerned in the promotion, formation or management of a co-operative society or a company,for such period, not exceeding fifteen years, as may be specified in the order.10.Supplementary provisions relating to proceedings under paragraphs 8 and 9(1)On the hearing of an application under paragraph 8 (fraudulent trading by co-operative society in liquidation) or paragraph 9 (wrongful trading), the liquidator may personally give evidence or call witnesses.(2)If the High Court makes an order under paragraph 8 or 9, it may make such further orders as it considers appropriate for giving effect to the order.(3)In particular, the High Court may—(a)provide for the liability of any person under the order to be a charge—(i)on any debt or obligation due from the society to the person; or(ii)on any mortgage or charge or any interest in a mortgage or charge on assets of the society held by or vested in the person, or any other person on the person's behalf, or any other person who claims as an assignee from or through the person liable or any person acting on that person's behalf; and(b)from time to time make such further order as may be necessary for enforcing a charge imposed under paragraph (a).(4)For the purposes of subparagraph (3)(a) (ii),"assignee"—(a)includes a person to whom or in whose favour, by the directions of the person made liable, the debt, obligation, mortgage or charge was created, issued or transferred or the interest created; but(b)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 order is made.(5)If the High Court makes an order under paragraph 8 or 9 in relation to a person who is a creditor of the society, it may direct that the whole or any part of any debt owed by the society to that person, and any interest on the debt, ranks in priority after all other debts owed by the society and after any interest on those debts.(6)The High Court can make an order under paragraph 8 or 9 even if the person concerned may be criminally liable in respect of matters giving rise to the making of the order.11.Member of the committee of co-operative society in insolvent liquidation prohibited from being member of the committee of, or being involved with, any other co-operative society that is known by a prohibited name(1)This paragraph applies to a person if—(a)a co-operative society is in insolvent liquidation on or after the commencement of this paragraph; and(b)the person was a member of the committee of the society at any time during the twelve months immediately preceding the date on which the liquidation of the society commenced.(2)For the purposes of this paragraph, a name is a prohibited name in relation to such a person if—(a)it is a name by which the society was known at any time during that period of twelve months; or(b)it is a name that is so similar to a name of the kind referred to in paragraph (a) as to suggest an association with the society.(3)Except with leave of the High Court, or in such circumstances as may be prescribed by the regulations, a person to whom this paragraph applies shall not at any time during the five years from and including the date on which the liquidation of the society commenced—(a)be a member of the committee of any other co-operative society that is known by a prohibited name;(b)in any way (directly or indirectly) be concerned or take part in the promotion, formation or management of any such society; or(c)in any way (directly or indirectly) be concerned or take part in the carrying on of a business carried on (otherwise than by a co-operative society) under a prohibited name.(4)A person who contravenes this paragraph commits an offence and on conviction is liable to a fine not exceeding one million shillings or to imprisonment for a term not exceeding twelve months, or to both.(5)A reference in this paragraph, in relation to a time, to a name by which a cooperative society is known is a reference to the name of the society at that time or to any name under which the society carried on business at that time.(6)For the purposes of this paragraph, a co-operative society is in insolvent liquidation if, at the time the liquidation commences, the society's assets are insufficient for the payment of its debts and other liabilities and the expenses of the liquidation.12.Circumstances in which persons are personally liable for debts of co-operative society(1)A person is personally responsible for all the relevant debts of a co-operative society if at any time the person—(a)is involved in the management of the society in contravention of paragraph 11; or(b)while is involved in the management of the society-acts or is willing to act on instructions given (without the leave of the High Court) by a person whom the person knows to be subject to a person to whom subparagraph (2) applies.(2)This subparagraph (1) applies to the following persons:(a)a person who is involved in the management of the company in contravention of paragraph 11;(b)a person who is subject to a disqualification order or disqualification undertaking, or to foreign restrictions, under Part X of the Companies Act (Cap. 486), or(c)a person who is subject to any other restriction or disability of a kind prescribed by regulations made for the purpose of this section.(3)If, because of subparagraph (1), a person is personally responsible for the relevant debts of a co-operative society, the person is jointly and severally liable for those debts with the society and any other person who, whether under this paragraph or otherwise, is so liable.(4)For the purposes of this paragraph, the relevant debts of a co-operative society are—(a)in relation to a person who is personally responsible under clause (a) of subparagraph (1)—such debts and other liabilities of the society as are incurred at a time when the person was involved in the management of the society; and(b)in relation to a person who is personally responsible under clause (b) of that subparagraph—such debts and other liabilities of the society as are incurred at a time when the person was acting or was willing to act on instructions given as referred to in that paragraph.(5)For the purposes of this paragraph, a person is involved in the management of a co-operative society if the person—(a)is a member of the committee of the society; or(b)is concerned, whether directly or indirectly, or takes part, in the management of the society.(6)For the purposes of this paragraph, a person who, as a person involved in the management of a co-operative society, has at any time acted on instructions given (without the leave of the High Court) by another person whom the person knew at that time to be a person to whom subparagraph (2) applies is presumed, unless the contrary is shown, to have been willing at any later time to act on any instructions given by that person.13.Prosecution of delinquent officers and members of co-operative society in liquidation by the High Court(1)This paragraph applies to a co-operative society that is being liquidated by the High Court.(2)If the High Court concludes that a person who was at the relevant time an officer or past officer, or member, of the society may have committed an offence in relation to the society for which the person is criminally liable, the High Court may (either on the application of a person interested in the liquidation or on its own initiative) direct the liquidator to report the matter to the Commissioner.(3)If, while the society is being liquidated by the High Court, it appears to the liquidator that a person who, at the relevant time was an officer or past officer, or a member, of the society, may have committed an offence in relation to the society for which the person is criminally liable, the liquidator shall report the matter to the Commissioner.(4)In making a report under subparagraph (2) or (3), the liquidator shall provide the Commissioner with—(b)such access to and facilities for inspecting and taking copies of documents,as the Commissioner reasonably requires and the liquidator is able to reasonably give or provide.(5)As soon as practicable after receiving a report under subparagraph (2) or (3), the Commissioner shall forward the report to the Attorney-General for further investigation, together with —(a)the information and documents (if any) given or provided in accordance with subparagraph (4); and(b)such observations on the report, information and documents as the Official Receiver considers relevant.(6)On receiving a report under subparagraph (5), the Attorney-General shall investigate the matter concerned and such other matters relating to the affairs of the society as appear to the Attorney-General to require investigation.(7)For the purpose of an investigation under subparagraph (6), the Attorney-General may exercise any of the powers conferred on inspectors by Part XXX of the Companies Act (Cap. 486) as if the society were a company.14.Obligations arising under paragraph 13(1)For the purpose of an investigation by the Attorney-General under paragraph 13(6), a person has the same obligation to produce documents or give information, or otherwise assist the Attorney-General, as the person would have in relation to an inspector appointed under Part XXX of the Companies Act (Cap. 486).(2)An answer given by a person to a question put to the person in exercise of the powers conferred by paragraph 13(7) may be used in evidence against the person.(3)However, in criminal proceedings in which that person is charged with an offence to which this paragraph applies—(a)evidence relating to the answer may not be adduced; and(b)questions relating to it may not be asked, by or on behalf of the prosecution,unless evidence relating to it is adduced, or a question relating to it is asked, in the proceedings by or on behalf of that person.(4)This paragraph applies to all offences other than an offence under sections 107 and 114 of the Penal Code (false statements made on oath otherwise than in judicial proceedings or made otherwise than on oath).(5)If criminal proceedings are begun by the Director of Public Prosecutions following an investigation under paragraph 13(6), the liquidator and every officer and agent, and past officer and agent, of the society (other than the defendant) shall provide the Director of Public Prosecutions and the Attorney-General with such assistance in connection with the prosecution as the liquidator, officer or agent or past officer or agent is reasonably able to give.(6)In subparagraph (5), "agent" includes any bank or advocate of the society and any person employed by the society as auditor, whether that person is or is not an officer of the society.(7)If a person fails to provide assistance as required by subparagraph (5), the High Court may, on the application of the Director of Public Prosecutions or the Attorney-General, make an order directing the person to comply with that subparagraph.(8)If the application is made with respect to a liquidator, the High Court may also make an order directing the costs to be home by the liquidator personally.(9)However, the High Court may not make such an order if it is established that the failure to comply was due to the liquidator having insufficient assets of the society to enable the liquidator to provide the required assistance.
