New South Wales Consolidated Acts

LOAN FUND COMPANIES ACT 1976 - SECT 60

60 Appointment and powers of administrator

(1) Subject to this Division and with the approval of the Minister, the Supervisor may, by instrument in writing, appoint an administrator to administer the affairs and activities of a loan fund company if:

(a) the company has suspended business for a period of more than 2 months,

(b) after being notified by the Supervisor of any contravention of or failure to comply with a provision of this Act, of the Companies (New South Wales) Code or of the Companies Act 1961 that is applicable to it, the company has failed to remedy the contravention to the extent that it is capable of remedy, or has committed a further contravention of the provision or the failure to comply has continued, or

(c) following an inquiry into the affairs of the company under Division 2 or following an investigation under Part 6A of the Companies Act 1961 or under Part VII of the Companies (New South Wales) Code , the Supervisor is of the opinion that, in the interests of:

(i) members,

(ii) holders of options to acquire loan entitlement shares in the company, or

(iii) creditors of the company,

an administrator ought to be appointed to conduct the affairs and activities of the company.

(2) On the appointment of an administrator under subsection (1), the Supervisor shall serve on the loan fund company a copy of the instrument of the appointment and thereupon:

(a) the affairs and activities of the company shall be administered by the administrator until the administrator’s appointment is terminated under this Division,

(b) the administrator shall assume and be responsible for the management of the company and shall perform all of the duties and may perform any of the functions and exercise any of the powers of the directors of the company,

(c) the directors of the company shall cease to hold office,

(d) any delegation made by the directors shall cease to have effect, and

(e) unless the administrator otherwise determines within 3 days after the service on the company of the copy of the instrument of the administrator’s appointment, either generally or with respect to any particular contract or contracts, all contracts of service and for the performance of services entered into by or on behalf of the company shall terminate at the expiration of that period.

(3) Subject to this Division, an administrator appointed under this section:

(a) shall, as soon as practicable after the administrator’s appointment as such, take into the administrator’s custody or under the administrator’s control all the property and things in action to which the loan fund company is or appears to be entitled, and

(b) shall, subject to and in accordance with any direction given to the administrator by the Supervisor, conduct the affairs and activities of the company in such manner as the administrator thinks most economical and most beneficial to the interests of the members and creditors of the company and of holders of options to acquire loan entitlement shares in the company.

(4) While an administrator of a loan fund company holds office as such, the administrator shall be chairperson of any meeting or adjourned meeting of the company.

(5) Except as provided under section 61, a person shall not be appointed as a director of the company while an administrator of the company holds office as such.

(6) An administrator of a loan fund company shall be deemed to have vacated the administrator’s office if:

(a) the administrator dies,

(b) the administrator becomes bankrupt, applies to take the benefit of any law for the relief of bankrupt or insolvent debtors, compounds with his or her creditors or makes an assignment of his or her remuneration as administrator, or of his or her estate, for their benefit,

(c) the administrator becomes a temporary patient, a continued treatment patient, a protected person or an incapable person within the meaning of the Mental Health Act 1958 or a person under detention under Part 7 of that Act,

(d) the administrator is convicted in New South Wales of a crime or an offence punishable by imprisonment for 12 months or more, or the administrator is convicted elsewhere than in New South Wales of a crime or an offence which, if committed in New South Wales, would be a crime or an offence so punishable,

(e) the administrator resigns his or her office by writing under his or her hand addressed to the Supervisor, or

(f) the administrator’s appointment is revoked by the Supervisor under subsection (7).

(7) The Supervisor may, and, if required to do so by the Minister, shall, revoke the appointment of an administrator appointed under this section.

(8) Where the office of administrator of a loan fund company is deemed to have been vacated under subsection (6), the Supervisor, by instrument in writing, shall, unless before the occurrence of the vacancy directors have been appointed at a general meeting of the company called under section 61, appoint another person to fill the vacancy.

(9) Notwithstanding the appointment of an administrator of a loan fund company under this section and for so long as the administrator holds office, the provisions of the Companies (New South Wales) Code relating to the appointment and re-appointment of auditors and the rights and duties of auditors shall continue to apply to and in relation to the company, and in the application of those provisions to and in relation to the company any reference in those provisions to the directors of the company shall be construed as a reference to the administrator of the company.