Notice No. 015/GGBM/94 of 21 November - Limits on Shareholding in Other Companies

BANCO DE MOÇAMBIQUE
NOTICE NO. 015/GGBM/94
SUBJECT: Limits on participation in the capital of other companies.

The Bank of Mozambique, exercising the competence conferred upon it by the combined provisions of Article 50 of Law No. 28/91 of December 31, and Article 37 of Law No. 1/92 of January 3, determines:

Article 1
All credit institutions, hereinafter referred to as institutions, must observe limits on participation in the capital of other companies.

Article 2
For the purposes of this Notice, the following are considered:

1. Qualified participation – the direct or indirect participation that represents a percentage not less than 10% of the capital or voting rights of the participating company, or that, for any other reason, allows significant influence on management, considering as equivalent to the participant's voting rights, namely the following:

a) Those held by other persons or entities, in their own name or on behalf of others, but for the account of the participant; b) Those held by companies controlled by the participant; c) Those held by a third party with whom the participant has entered into an agreement obliging them to adopt, through the concerted exercise of their respective voting rights, a common policy regarding the management of the company in question; d) Those inherent in shares where the participant holds the usufruct.

2. Controlling relationship – a relationship that exists between an individual or legal person and a company when any of the following situations occurs:

a) The individual or legal person in question holds the majority of voting rights; b) Being a partner of the company and having the right to appoint or remove more than half of the members of the management body or the supervisory body; c) Being able to exercise dominant influence over the company by virtue of a contract or clause in its articles of association; d) Being a partner of the company and controlling alone, by virtue of an agreement concluded with other partners of the company, the majority of voting rights.

3. Own funds – the amounts indicated in Notice No. 2/GGBM/94 of January 27, calculated under the conditions established therein.

Article 3

1. Without prejudice to the provisions of Article 32 of Law No. 28/91 of December 31, credit institutions may not hold, directly or indirectly, in the capital of a company, participations whose amount exceeds 15% of the own funds of the participating institution.

2. The total amount of qualified participations in companies may not exceed 60% of the own funds of the participating institution.

3. Credit institutions may not hold, directly or indirectly, in a company, a participation that grants them more than 25% of the voting rights corresponding to the capital of the participating company.

4. Indirect participation is considered to be the holding of shares or other capital parts by persons or entities under the conditions referred to in letters a) to d) of definition 1. of Article 2.

Article 4
The limits provided for in the previous article may be exceeded as a result of the repayment of own credit, and the situations resulting therefrom must be regularized within a period of two years.

Article 5
With reference to the last day of each quarter, and within the following 30 days, institutions must inform the Bank of Mozambique about their participations in the capital of other companies.

Article 6
Institutions must regularize situations that are not in compliance with Article 3, existing on the date of entry into force of this Notice, by December 31, 1995.

Article 7
The Banking Supervision Department of the Bank of Mozambique will issue the necessary instructions for the compliance with the provisions of this Notice.

Article 8
Doubts resulting from the interpretation and application of this Notice will be clarified by the Banking Supervision Department of the Bank of Mozambique.

Maputo, November 21, 1994.
THE GOVERNOR
Adriano Afonso Maleiane