38. Control on acquisition of major shareholdings

No Islamic bank may enter into an agreement to acquire the share capital of any company by virtue of which the Islamic bank would, if the agreement were carried out, acquire or hold, whether directly or indirectly, an interest exceeding 20 per cent or more of the share capital of that company, without first notifying the Authority of its intention to enter into the agreement and obtaining the prior approval of the Authority to its entering into the agreement.

The Authority may give its approval under subsection (1) with or without conditions and, if it declines to give its approval, may do so without giving any reasons.

Subsection (1) does not apply to an agreement by virtue of which the Islamic bank would acquire an interest exceeding 20 per cent or more of the share capital in a company by way of enforcement of security to satisfy debts due to it by the company if, before making such an acquisition

If, in the case of such an acquisition as is referred to in subsection (3), the Authority does not grant approval, the Islamic bank concerned shall dispose of the shareholdings as soon as practicable.

An Islamic bank which contravenes any of the provisions of this section is guilty of an offence and liable on conviction to a fine not exceeding $150,000.