General Loanand Stock Act Cap 419 - as Plain Text by MWakili

LAWS OF KENYA GENERAL LOAN AND STOCK ACT CHAPTER 419 Revised Edition 2012 [1982] Published by the National Council for Law Reporting with the Authority of the Attorney-General www.kenyalaw.org [Rev.

2012] CAP.

419 General Loan and Stock CHAPTER 419 GENERAL LOAN AND STOCK ACT ARRANGEMENT OF SECTIONS Section 1.

Short title and application.

2.

Interpretation.

3.

Loans to be raised by debentures or stock.

4.

Incidence of loans.

5.

Borrowing upon debentures.

6.

Amount of each debenture.

7.

How debentures to be redeemable.

8.

Interest coupons.

9.

Form of debenture and coupons.

10.

Debentures and coupons transferable by delivery.

11.

Registry of debentures.

12.

Payment of interest.

13.

Mode of providing for payment of interest on debentures.

14.

Further sums to be remitted for redemption of debentures.

15.

Application of sinking fund.

16.

Creation of sinking fund for redemption of debentures payable on fixed date.

17.

Disposal of sinking fund when debentures redeemed by purchase or annual drawings.

18.

Appointment of day for drawing of debentures.

19.

Notice of time and place appointed for drawing.

20.

Mode of drawing.

21.

Notice of debentures drawn for redemption.

22.

Payment of drawn debentures.

23.

Cesser of interest from day appointed for payment of principal.

24.

Redeemed debentures to be cancelled.

25.

Borrowing upon stock.

26.

When principal to be repaid.

27.

Mode of providing for payment of interest on stock.

28.

Mode of providing for payment of principal of stock.

29.

Creation of sinking fund for redemption of stock.

30.

Obligation to meet deficiencies.

31.

Expenses to be paid out of sinking fund.

32.

Powers of Minister.

33.

Exchange of securities for stock.

34.

Converted securities to be cancelled.

35.

Trustees to apportion amount of sinking fund released by conversion.

36.

Sinking funds released: how to be disposed of.

3 [Issue 1] CAP.

419 [Rev.

2012] General Loan and Stock Section 37.

Creation, inscription, registration, issue, conversion and transfer of stock.

38.

Regulations under Colonial Stock Act, 1877.

39.

Saving.

[Issue 1] 4 [Rev.

2012] CAP.

419 General Loan and Stock CHAPTER 419 GENERAL LOAN AND STOCK ACT [Date of commencement: 13th June, 1950.] An Act of Parliament to declare the terms and conditions applicable to loans authorized to be raised in the United Kingdom by the Government of Kenya, and to provide for the creation of Kenya stock [Act No.

14 of 1950, Act No.

21 of 1961, L.N.

2/1964, L.N.

303/1964.] 1.

Short title and application (1) This Act may be cited as the General Loan and Stock Act.

(2) This Act applies only to the raising of loans in the United Kingdom, and nothing in this Act shall prevent the raising of loans in Kenya upon such terms and conditions as are specified in any Act authorizing the raising of such loans.

2.

Interpretation In this Act, except where the context otherwise requires registered stock means stock transferable by instrument in writing; stock includes both inscribed stock and registered stock.

3.

Loans to be raised by debentures or stock Whenever by any Act authority has been given, or is hereafter given, to raise any some of money for the purposes mentioned in that Act, the Minister, or the Crown Agents acting on his behalf, may from time to time, as he or they may deem expedient, raise that sum either by debentures or by stock, or partly by debenture and partly by stock.

[L.N.

303/1964.] 4.

Incidence of loans The principal moneys and interest represented by debentures or stock issued under this Act are hereby charged on and shall be payable out of the Consolidated Fund and assets of Kenya.

[Act No.

21 of 1961, Sch.] 5.

Borrowing upon debentures When the Minister, or the Crown Agents acting on his behalf, deem it expedient to raise money by debentures, those debentures shall be issued in the United Kingdom on behalf of the Government of Kenya by the Crown Agents, upon the best and most favourable terms that can be obtained, and shall be signed by any one of them on that behalf.

[L.N 303/1964.] 6.

Amount of each debenture Every debenture issued under this Act shall be for the sum of not less than one hundred pounds sterling.

5 [Issue 1] CAP.

419 [Rev.

2012] General Loan and Stock 7.

How debentures to be redeemable The debentures shall be redeemable either (a) at par on a fixed date to be declared on the issue of the debentures, that date not being later than sixty years from the date of issue: Provided that the Minister, or the Crown Agents acting on his behalf, may reserve the option to redeem the debentures before such date on such conditions as may be declared at the time of issue; or (b) by annual drawings at par or at the option of the Minister, or the Crown Agents acting on his behalf, by purchase at or below par.

[L.N 303/1964.] 8.

Interest coupons (1) There shall be attached to every debenture coupons for the payment of the interest to become due in each half-year upon the principal represented by the debenture.

(2) The coupons shall be sufficient in number to provide for the payment of the interest, either during the whole period for which the debenture has to run, or such limited period as the Crown Agents, acting on behalf of the Government of Kenya, may determine.

9.

Form of debenture and coupons The debentures and the coupons relating thereto shall be in such form as the Minister, or the Crown Agents acting on his behalf, may direct or approve.

[L.N 303/1964.] 10.

Debentures and coupons transferable by delivery Every debenture and coupon, and the right to receive the principal and interest represented thereby, shall be transferable by delivery.

11.

Registry of debentures Every debenture shall, before being issued, be registered in a register book to be kept for that purpose at the office in London of the Crown Agents.

12.

Payment of interest The interest upon the principal represented by each debenture shall run from the day named in that behalf in the debenture, and shall be paid half-yearly on the days named in that behalf in the debenture, at the office in London of the Crown Agents.

13.

Mode of providing for payment of interest on debentures (1) So long as any of the debentures remain outstanding, the Minister shall, in each half-year ending with the day on which the interest on the debentures falls due, issue out of the Consolidated Fund a sum equal to one-half years interest on the whole of the debentures issued, including any which may have been redeemed, but exclusive of any which may have been at any time exchanged for stock, and shall remit that sum to the Crown Agents at such time as will enable them to pay thereout the then current half-years interest on the day on which it falls due.

[Issue 1] 6 [Rev.

2012] CAP.

419 General Loan and Stock (2) Debentures shall not be deemed to be outstanding for the purpose of this Act by reason only that one or more of the debentures have not been presented for payment on the day appointed for payment and have, in consequence, not been paid.

[Act No.

21 of 1961, Sch., L.N 303/1964.] 14.

Further sums to be remitted for redemption of debentures (1) The Minister shall, in the half-year ending on the date specified in the terms of issue of the loan as that on which the first contribution to the sinking fund shall be taken and in each subsequent half-year, issue out of the Consolidated Fund, for the formation of a sinking fund, an additional sum equal to one-half of the annual contribution specified in the prospectus or, in the case of a loan not issued publicly, in the terms of issue relating to the loan, in respect of the total nominal amount of all the debentures issued, including any which may have been redeemed, but exclusive of any which may have been at any time exchanged for stock, and shall remit that sum to the Crown Agents with the remittance hereinbefore mentioned.

(2) Notwithstanding anything to the contrary contained in subsection (1), if at any time the trustees of the sinking fund of any loan issued under this Act are satisfied that the value of the fund will be sufficient with further accumulations of interest but without further payment of contributions to enable the loan to be redeemed out of the proceeds of the sinking fund not later than the final redemption date, the Minister may suspend further contributions to the sinking fund: Provided that contributions to the sinking fund shall be recommenced of the trustees at any time and they inform the Minister that this is necessary.

[Act No.

21 of 1961, Sch., L.N.

303/1964.] 15.

Application of sinking fund The sinking fund shall be applied in the first place in payment of all expenses of, or incidental to, the redemption of the debentures and the cost and expenses of all notices required by this Act to be given, and in the next place, and subject to those payments, in repayment of the principal moneys for the time being represented by the debentures.

16.

Creation of sinking fund for redemption of debentures payable on fixed date In the case of debentures redeemable on a fixed date, the Crown Agents shall place at interest or invest in the purchase of such securities as may be approved by the Minister so much of the money so remitted to them as is not required for the payment of interest for the current half-year, a sinking fund for the final extinction of the debt, and the Crown Agents shall also place at interest or invest in the purchase of like securities the accumulations of interest or the dividends, interest to produce of those investments, and may, from time to time, with the approval of the Minister, change any such investments, and shall hold that fund in trust for the repayment of the principal moneys for the time being represented by the debentures.

[L.N.

303/1964.] 7 [Issue 1] CAP.

419 [Rev.

2012] General Loan and Stock 17.

Disposal of sinking fund when debentures redeemed by purchase or annual drawings In the case of debentures redeemable by annual drawings, the Crown Agents shall place and keep the moneys so remitted to them or so much thereof as may not be required for immediate payments, at interest, and shall hold all such moneys and the accumulation thereon in trust to apply them in the first place to the purchase of the debentures when they can be obtained at a price not exceeding par, and secondly, to the redemption of the debentures by means of annual drawings.

18.

Appointment of day for drawing of debentures After the date specified in the Act authorizing a loan as that of which the contributions to the sinking fund shall commence in respect of that loan, and so long thereafter as any of the debentures remain outstanding and unsatisfied, the Crown Agents shall in every year, unless the whole of the money applicable in that year to the redemption of debentures has been applied in the purchase thereof, appoint a day in that year for the drawing by lot of the debentures to be redeemed.

19.

Notice of time and place appointed for drawing If a day is appointed for drawing, the Crown Agents shall give, by advertisement in the London Times newspaper, not less than fifteen days previous notice, specifying the day on which, and the hour and place at which, the drawing will take place.

20.

Mode of drawing On the day and at the hour and place so specified, the Crown Agents shall hold a meeting, at which the holder of any debenture may be present, and shall then in the presence of such debenture holders as may attend, and of a notary public, draw by lot, out of the whole number of debentures for the time being outstanding, debentures of the specified nominal amount.

21.

Notice of debentures drawn for redemption The Crown Agents shall thereupon declare the distinguishing numbers of the debentures drawn for redemption, and shall, as soon as may be, by advertisement in the London Times newspaper, specify those numbers and appoint a day, being later as to each debenture than the day on which the then current half-years interest hereon is payable, on which the principal moneys represented by the debentures distinguished will be repaid.

22.

Payment of drawn debentures On the day so appointed, the Crown Agents shall, at their office in London, on demand, pay to the holders of the debentures drawn for repayment the principal moneys represented by those debentures, with all interest payable thereon up to that day.

23.

Cesser of interest from day appointed for payment of principal From and after the day appointed for the repayment of any debenture, all interest on the principal moneys represented thereby shall cease and determine, whether payment of the principal has been demanded or not.

[Issue 1] 8 [Rev.

2012] CAP.

419 General Loan and Stock 24.

Redeemed debentures to be cancelled (1) Upon the repayment of the principal moneys represented by any debenture, the debenture, with all coupons thereunto belonging, shall be delivered up to the Crown Agents, to be cancelled by them and disposed of in such manner as the Minister, or the Crown Agents acting on his behalf, may decide.

(2) Any debenture redeemed by purchase shall likewise be so cancelled and disposed of.

[L.N 303/1964.] 25.

Borrowing upon stock When the Minister, or the Crown Agents acting on his behalf, deem it expedient to raise money by the issue of stock, then that stock shall be issued in the United Kingdom by the Crown Agents under the Colonial Stock Act, 1877, (40 and 41, Vict., c.

59) of the United Kingdom, upon the best and most favourable terms that can be obtained.

[L.N 303/1964.] 26.

When principal to be repaid (1) All the stock which may be created under this Act shall be redeemable at par on a date to be named principal in that behalf by the Crown Agents when issuing the stock, that date not being later than sixty years from the date of issue: Provided that the Minister, or the Crown Agents acting on his behalf, may reserve the option to redeem the stock in whole or in part by drawings or otherwise, at anytime before that date on such conditions as may be declared at the time of issue.

(2) From and after the date appointed for the redemption of the stock or any part of it, all the interest on the principal moneys represented thereby shall cease and determine, whether payment of the principal has been demanded or not.

[L.N 303/1964.] 27.

Mode of providing for payment of interest on stock So long as any of the stock remains unredeemed, the Minister shall, in each half-year ending with the day on which the interest on the stock falls due, issue out of the Consolidated Fund a sum equal to one half-years interest on the whole of the stock, and shall remit that sum to the Crown Agents at such time as will enable them to pay thereout the then current half-years interest on the day when it falls due.

[Act No.

21 of 1961, Sch., L.N 303/1964.] 28.

Mode of providing for payment of principal of stock (1) The Minister shall, in the half-year ending on the date specified in the terms of issue of the loan as that on which the first contribution to the sinking fund shall be taken and in each subsequent half-year, issue out of the Consolidated Fund for the formation of a sinking fund an additional sum equal to one-half of the annual contribution specified in the prospectus or, in the case of a loan not issued publicly, in the terms of issue relating to the loan, in respect of the total nominal amount of the stock, including any such stock which may at any time have been issued in exchange for debentures under the authority of this Act, and shall remit the sum to the Crown Agents with the remittance hereinbefore mentioned.

9 [Issue 1] CAP.

419 [Rev.

2012] General Loan and Stock (2) Notwithstanding anything to the contrary contained in subsection (1), if at any time the trustees of the sinking fund of any loan issued under this Act are satisfied that the value of the fund will be sufficient with further accumulations of interest but without further payment of contributions to enable the loan to be redeemed out of the proceeds of the sinking fund not later than the final redemption date, the Minister may suspend further contributions to the sinking fund: Provided that contributions to the sinking fund shall be recommenced if the trustees at any time inform the Minister that this is necessary.

[Act No.

21 of 1961, Sch., L.N.

303/1964.] 29.

Creation of sinking fund for redemption of stock The Crown Agents, shall, for the purpose of forming the sinking fund, from time to time place at interest or invest in the purchase of such securities as may from time to time be approved by the Minister so much of the money so remitted to them as is not required for the payment of interest for the current half-year, and shall also place at interest or invest in the purchase of like securities the accumulations of interest or the dividends, interest or produce of those investments, and may from time to time, with the approval of the Minister, change any such investments, and shall hold that fund in trust for the repayment of the principal moneys for the time being represented by the stock.

[L.N.

303/1964.] 30.

Obligation to meet deficiencies In case the sinking funds provided for by this Act are insufficient for the payment of all the principal moneys borrowed under the authority of this Act at the time they become due, the Minister shall make good the deficiency out of the Consolidated Fund and assets of Kenya.

[Act No.

21 of 1961, Sch., L.N 303/1964.] 31.

Expenses to be paid out of sinking fund All expenses of or incidental to the management of the sinking fund, or to the payment of the principal moneys borrowed, shall be paid out of the sinking fund.

32.

Powers of Minister The Minister shall also have, and may from time to time exercise, the following powers and authorities or any of them (a) he may authorize the Crown Agents, when issuing any loan in the form of debentures, to declare that those debentures will be convertible into stock at such dates and on such terms and conditions as may be prescribed by the Crown Agents at the time of the issue of the debentures; (b) he may declare all or any of Kenyas loans whether existing in the form of stock or debentures, and whether issued before or after the commencement of this Act, to be convertible into stock to be issued under this Act; (c) he may authorize the creation and issue of such an amount of stock in exchange for the securities held for such loans as may be necessary; [Issue 1] 10 [Rev.

2012] CAP.

419 General Loan and Stock (d) he may authorize the creation and sale of any such stock or debentures for the purpose of raising money for redeeming any outstanding loans, whether issued before or after the commencement of this Act, for paying any expense in the creation of stock, and otherwise for carrying out the provisions of this Act; (e) any conversion so authorized may be effected either by an arrangement with the holders of existing securities or by purchase thereof out of moneys raised by the sale of stock, or partly in one way and partly in the other.

[L.N 303/1964.] 33.

Exchange of securities for stock Nothing in this Act shall authorize an increase of the capital or of the annual charge on any loan, except (a) when securities exchanged for stock bear a rate of interest not less than the stock, an additional amount of stock may be created and issued to make up the difference in saleable value between the securities and the stock; (b) in the case of the conversion of securities into stock, the Crown Agents shall issue such an amount of stock as may be required to defray the stamp duties and all other expenses incidental to the conversion; (c) in accordance with such terms and conditions as may be prescribed under paragraph (a) of section 32.

34.

Converted securities to be cancelled The securities exchanged or otherwise converted into stock under this Act shall be forthwith cancelled by the Crown Agents, and the debentures surrendered shall be cancelled and transmitted to the Minister.

[L.N 303/1964.] 35.

Trustees to apportion amount of sinking fund released by conversion The trustees of the sinking fund appointed under this Act, and acting under any Act authorizing the issue of any securities which may be exchanged into stock or cancelled or purchased under this Act, shall determine what amount of the sinking fund held by them and created for repayment of those securities shall be released, and in the determination of that question the trustees shall take into consideration the value of the whole investments held by them on account of the sinking funds, the amount of the debt remaining a charge on the sinking funds and such matters as the trustees may think fit to take into account.

36.

Sinking funds released: how to be disposed of So much of the sinking funds as may be released shall either be transferred to the trustees of the stock sinking fund, or be disposed of in such a manner as the Minister with the advice and consent of the National Assembly may direct.

[L.N.

303/1964.] 11 [Issue 1] CAP.

419 [Rev.

2012] General Loan and Stock 37.

Creation, inscription, registration, issue, conversion and transfer of stock The Crown Agents may from time to time, at the request of the Minister, make arrangements for all or any of the following things (a) for inscribing and registering stock in their books; (b) for managing the creation, inscription, registration and issue of stock, including the issue of certificates of title in respect of that stock; (c) for effecting the conversion of loans into stock; (d) for paying interest on stock and managing the transfers thereof; (e) for issuing stock certificates to bearer, and, as often as occasion requires, re-inscribing or re-registering them; (f) for effecting the exchange or conversion of inscribed stock into registered stock.

[L.N 303/1964.] 38.

Regulations under Colonial Stock Act, 1877 Authority is hereby given for the making of regulations under section 16 of the Colonial Stock Act, 1877, of the United Kingdom, to provide that, in accordance with section 1 of the Colonial Stock Act, 1948, of the United Kingdom, stock issued (whether before or after the passing of the last-mentioned Act) under this Act or the General Loan and Inscribed Stock Act (No.

40 and 41, Vict., c.

59, No.

12 and 13, Geo.

6, Cap.

46 (1948) now repealed) shall be transferable by instrument in writing in accordance with the regulations and in no other manner.

39.

Saving The repeal of the General Loan and Inscribed Stock Act (Cap.

46 (1948)) shall not prejudice the rights of any person who holds stock or bonds in any loan issued under the authority thereof.

[Issue 1] 12.