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(b) to the extent that those net assets are reduced,
the financial assistance is given out of distributable
profits;
(c) the giving of the financial assistance must be approved
by a special resolution of the company in general
meeting;
(d) where the financial assistance is for the acquisition
of shares in the company's holding company, that holding company and any intermediary holding company must also give approval by special resolution in general meeting; (e) before the general meeting to approve a special
resolution for the giving of assistance, the directors of the company giving the financial assistance (and if the shares to be acquired are shares in the holding company, the directors of the holding company and of any intermediary holding company) must make a statutory declaration of solvency in respect of
The statutory declaration must have
the company.
annexed to it a report by the auditors of the
company that they have inquired into the state of affairs of the company and are not aware of anything
to indicate that the opinions expressed by the
directors in the statutory declaration are
unreasonable.
We noted the following points about the new provisions: (1) as already mentioned, the prohibition of a public
company giving financial assistance goes against the
recommendations of the Jenkins Committee;
/14.