1972-HKRS28-16-20_Part05 — Page 3

Addition of

new section

40A.

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(b) the consent of a person is required under section 38C of this Ordinance to the issue of the prospectus and be either has not given that consent or has withdrawn it before the issue of the prospectus,

the directors of the company, except any without whose knowledge or consent the prospectus was issued, and any other person who authorized the issue thereof shall be liable to indemnify the person named as aforesaid or whose consent was required as aforesaid, as the case may be, against all damages. costs and expenses to which he may be made liable by reason of his name having been inserted in the prospectus or of the inclusion therein of a statement purporting to be made by him as an expert, as the case may be. or in defending himself against any action or legal proceeding brought against him in respect thereof;

Provided that a person shall not be deemed for the purposes of this subsection to bave authorized the issue of a prospectus by reason only of his having given the consent required by section 38C of this Ordinance to the inclusion therein of a statement purporting to be made by him as an expert.

(5) For the purposes of this section- (a) the expression "promoter" means

a pro- motor who was a party to the preparation of the prospectus, or of the portion thereof containing the untrue statement, but does not include any person by reason of his acting in a professional capacity for persons engaged in procuring the formation of the company; and

(b) the expression "expert" has the same mean-

ing as in section 38C.".

The principal Ordinance is amended by adding after section 40 the following new section-

"Criminal Nability for misslate- ments in prospectus. 1948 2. J8.

L. 44.

40A. (1) Where a prospectus issued after the commencement of the Companies (Amendment) Or- dinance 1972 includes any untrue statements, any person who authorized the issue of the prospectus shall be liable-

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(a) on conviction on indictment, to a flac of fifty thousand dollars and to imprisonment for two years; or

(b) on summary conviction, to a fine of ten thousand dollars and to imprisonment for

six months;

unless he proves either that the statement was im- material or that he had reasonable grounds to believe and did up to the time of the issue of the prospectus believe that the statement was true.

(2) A person shall not be deemed for the pur- poses of this section to have authorized the issue of a prospectus by reason only of his having given the consent required by section 38C to the inclusion Therein of a statement purporting to be made by him as an expert”.

9. Section 41 of the principal Ordinance is amended in subsection (3)-

ing-

(a) by deleting "37" and substituting the following--

"38D": and

(5) by inserting after "allotted" in paragraph (6) the follow-

*

*

or a copy thereof,”.

10. The principal Ordinance is amended by adding after section 41 the following new section-

"Interpre-

tion of provisions relating to prospectuses. 1948 38,

■. 45,

41A. For the purposes of the foregoing pro- visions of this Part--

(a) a statement included in a prospectus shall be deemed to be untrue if it is misleading in the form and context in which it is in- cluded; and

(b) a statement shall be deemed to be included in a prospectus if it is contained therein or in any report or memorandum appearing on the face thereof or by reference incorporated therein or issued therewith.".

11. Section 42 of the principal Ordinance is amended...........

in subsection (1), by deleting "paragraph 5" and sub- stituting the following-

(a)

Amendment of section 41.

Addition of new section 41A

Amendment of section 42.

"paragraph 7":