Conflict of interest

(1) A director or officer of a licensee or financial holding company who– (a) is a party to a loan, contract or transaction, or a proposed loan, contract or transaction with the licensee or financial holding company; or (b) is a director, shareholder or officer of, or has an interest in or a relation to, any person who is a party to a material loan, contract or transaction, or a proposed material loan, 102 contract or transaction with the licensee or shall disclose in writing to the licensee or financial holding company the nature and extent of the material interest or relation. (2) The disclosure required by sub-section (1) shall be made by the director or officer when the matter or proposed contract comes or ought reasonably to come to the attention of the (3) A general notice in writing to the board of directors by a director or officer, disclosing at the time such person assumes or is appointed to his office and from time to time, but in no event less than annually, every commercial, financial, agricultural, industrial or other business or family interest that such person has at the time, and stating that the person is to be regarded as interested in any contract between the licensee or financial holding company and any person named in the disclosure, shall be a sufficient declaration of interest in relation to any such contract. (4) A director or officer who has a material interest or a material relation within the scope of sub-section (1) or (3) shall not be present, or vote at a meeting of the board of directors or a committee of the board of directors of that licensee or financial holding company at which the matter is considered and discussed including a loan, an advance or other credit facility which would result in a direct or indirect financial benefit. (5) For the purposes of sub-sections (1), (3), and (4) a director or officer shall be deemed to have a material interest in, or material relation to, another person, if that director or officer, or the spouse, parent, sibling or child of such director or officer103 (a) in the case of another person which is a body corporate or other entity, is or during the last fiscal year has been an officer, director or partner of such body corporate or other entity, or owns or has the power to vote, or during the last fiscal year has owned or held the power to vote, twenty-five per centum or more of any class of shares or other equity interest of such body corporate or other entity; (b) owes money to or otherwise is indebted to, or is a guarantor of any obligation of such other person in an amount exceeding two per centum of the fully paid-up capital and reserves in the case of a local licensee, or the assigned capital and reserves in the case of a foreign licensee; (c) engages or during the last fiscal year has engaged in any transaction with such other person in an amount which exceeds ten per centum of the director’s or officer’s net worth; or (d) is the spouse, parent, sibling or child of any person described in paragraph (b) or (c). (6) Where a director or officer fails to disclose a material conflict of interest in accordance with this section, the Central Bank may– (a) require the licensee or financial holding company to suspend the director or officer from office for a period of one to three years; or (b) remove the director or officer from office. 104 (7) A director or officer who contravenes sub-section (1), (3) or (4) shall, upon being called in writing to do so by the Central Bank, pay a fine not exceeding one hundred thousand dollars for failure to comply.