841
(2) This section shall not apply to a private company or to a company which has allotted any shares or debentures before the date of the coming into operation of this Or- dinance.
85. A company shall not previously to the statutory Restriction meeting vary the terms of a contract referred to in the on alteration prospectus or statement in lieu of prospectus, except subject to the approval of the statutory meeting,
of terms mentioned in prospectus or statement
n lieu of prospectus. Ib. s. 83.
£6.—(1) Where a prospectus invites persons to sub- Liability for scribe for shares in or debentures of a company, every statements person who is a director of the company at the time of the in pros. issue of the prospectus, and every person who has authori. pectus.
[b. s. 84. sed the naming of him and is named in the prospectus as a director or as having agreed to become a director either immediately or after an interval of time, and every promoter of the company, and every person who has authorised the issue of the prospectus, shall be liable to pay compensation to all persons who subscribe for any shares or debentures on the faith of the prospectus for the loss or damage they may have sustained by reason of any untrue statement therein, or in any report or memorandum appearing on the face thereof, or by reference incorporated therein or issued therewith, unless it is proved –
(a) With respect to every untrue statement not purporting to be made on the authority of an expert, or of a public official document or state- ment, that he had reasonable ground to believe, and did up to the time of the allotment of the shares or debentures, as the case may be, be- lieve, that the statement was true; and, (6) With respect to every untrue statement pur- porting to be a statement by or contained in what purports to be a copy of or extract from a report or valuation of an expert, that it fairly represented the statement, or was a correet and fair copy of or extract from the report or valuation. Provided that the director, person named as director, promoter, or person who authorised the issue of the prospectus, shall be liable to pay compensation as aforesaid if it is proved that he had no reasonable ground to believe that the person making the statement, report, or valuation was competent to make it ; and
(e) With respect to overy untrue statement purport- ing to be a statement made by an official person or contained in what purports to be a copy of or extract from a public official doen- ment, that it was a correct and fair representa- tion of the statement or copy of or extract from the document :
or unless it is proved―
(i) that having consented to become a director of the company he withdrew his consent before the issue of the prospectus, and it was issued without his authority or consent; or
(i) that the prospectus was issued without his kuowledge or consent, and that on becoming aware of its issue he forthwith gave reasonable public notice that it was issued without his knowledge or consent; or
(iii) that after the issue of the prospectus and before allotment thereunder, he, on becoming aware of any untrue statement therein, withdrew his consent thereto, and gave reasonable public notice of the withdrawal, and of the reason therefor,
(2) Where a company existing before the date of the coming into operation of this Ordinance, has issued shares or debentures, and for the purpose of obtaining further capital by subscriptions for shares or debentures issues a prospectus, a director shall not be liable in respect of any statement therein, unless he has authorised the issue of the prospectus, or has adopted or ratified it.