17.
| (1) A licensed commercial bank incorporated or established in Sri Lanka shall not have as its subsidiary a company which is not a licensed commercial bank: |
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| (2) A licensed commercial bank shall not accord to any of its subsidiary companies, treatment which is more favourable than the treatment accorded to other constituents of the bank, carrying on the same business as any such subsidiary company. |
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| (3) For the purposes of this Act a company shall, subject to the provisions of subsection (4) of this section, be deemed to be a subsidiary of another if, and only if
| | (i) that other company holds more than half in nominal value of its equity share capital; or | | |
| | (ii) that other company is a shareholder of it and controls the composition, of its board of directors; or | | |
| | (iii) the first-mentioned company is a subsidiary of any company which is that other's subsidiary. | | |
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| (4) In determining whether one company is a subsidiary of another
| | (a) any shares held or power exercisable by that other in a fiduciary capacity shall be treated as not held or exercisable by it; | | |
| | (b) subject to the provisions of paragraphs (c) and (d). any shares held or power exercisable
| | | (i) ,by any person as a nominee for that other except where that other is concerned only in a fiduciary capacity ; or |
| (ii) by, or by a nominee for a subsidiary of that other, not being a subsidiary which is concerned only in a fiduciary capacity, |
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| | (c) any shares held or power exercisable by any person by virtue of the provisions of any debentures of the first mentioned company or of a trust deed for securing the issue of such debentures shall be disregarded ; | | |
| | (d) any shares held or power exercisable by, or by a nominee of, that other or its subsidiary (not being hold or exercisable as referred to in paragraph (c)) shall be treated as not held or exercisable by that other, if the ordinary business of that other or its subsidiary, as the case may be, includes the lending of money, and the shares are held or power is exercisable as aforesaid by way of security, only for the purposes of a transaction entered into in the ordinary course of that business. | | |
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| (5) For the purposes of this Act, a company shall be deemed to be another's holding company if, and only if, that other is its subsidiary. |
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| (6) In this Part the expression " equity share capital" in relation to a company, means its issued share capital excluding any part thereof which, neither in respect of dividends nor as respects capital, carries any right to participate beyond a specified amount in a distribution- |
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Sri Lanka Consolidated Acts