CO129-537-11 Companies Ordinance 1932 2-12-1932 - 26-5-1934 — Page 193

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(iii) that after the issue of the prospectus and before allotment thereunder, he, on becoming aware of any untrue statement therein, with drew his consent thereto, and gave reasonable public notice of the withdrawal, and of the reason therefor; or

(iv) that—

(a) as regards every untrue statement not purporting to be made on the authority of an expert or of a public official document or statement, he had reasonable ground to believe, and did up to the time of the allot- ment of the shares or debentures, as the case may be, believe, that the statement was true; and

(b) as regards every untrue statement purporting to be a statement by an expert or contained in what purports to be a copy of or extract from a report or valuation of an expert, it fairly represented the state- ment, or was a correct and fair copy of or extract from the report or valuation; and

(c) as regards every untrue statement pur- porting 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 document, it was a correct and fair represen- tation of the statement or copy of or extract from the document.

Provided that a person shall be liable to pay compen- sation as aforesaid if it is proved that he had no reasonable ground to believe that the person making any such statement, report or valuation as is men- tioned in paragraph (iv) (b) of this subsection was competent to make it.

(2) Where the prospectus contains the name of a person as a director of the company, or as having agreed to become a director thereof, and he has not consented to become a director, or has withdrawn his consent before the issue of the prospectus, and has not authorised or consented to the issue thereof, the directors of the company, except any without whose knowledge or consent the prospectus was issued, and any other person who authorised the issue thereof, shall be liable to indemnify the person named as aforesaid 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 in defending himself against any action or legal proceedings brought against him in respect thereof.

(3) Every person who, by reason of his being a director or named as a director or as having agreed to become a director, or of his having authorised the issue of the prospectus, becomes liable to make any pay- ment under this section may recover contribution, as in cases of contract, from any other person who, if sued separately, would have been liable to make the same payment, unless the person who has become so liable was, and that other person was not, guilty of fraudulent misrepresentation.

(4) For the purposes of this section

The expression "promoter"

means a promoter

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 :

The expression "expert" includes engineer, valuer, accountant, and any other person whose pro- fession gives authority to a statement made by him.

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offer of

prospectus.

40.-(1) Where a company allots or agrees to allot Document any shares in or debentures of the company with a containing view to all or any of those shares or debentures being shares or offered for sale to the public, any document by which debentures the offer for sale to the public is made shall for all for sale to purposes be deemed to be a prospectus issued by the be deemed company, and all enactments and rules of law as to 19 & 20 Geo. the contents of prospectuses and to liability in respect 5, c. 23, of statements in and omissions from prospectuses, or s. 38. otherwise relating to prospectuses, shall apply and have effect accordingly, as if the shares or debentures had been offered to the public for subscription and as if persons accepting the offer in respect of any shares or debentures were subscribers for those shares or deben- tures, but without prejudice to the liability, if any, of the persons by whom the offer is made, in respect of mis-statements contained in the document or other- wise in respect thereof.

(2) For the purposes of this Ordinance, it shall, unless the contrary is proved, be evidence that an allotment of, or an agreement to allot, shares or deben- tures was made with a view to the shares or debentures being offered for sale to the public if it is shown-

(a) that an offer of the shares or debentures or of any of them for sale to the public was made within six months after the allotment or agree- ment to allot; or

(b) that at the date when the offer was made the whole consideration to be received by the com- pany in respect of the shures or debentures had not been so received.

(3) Section thirty-six of this Ordinance as applied by this section shall have effect as though the persons making the offer were persons named in a prospectus as directors of a company, and section thirty-seven of this Ordinance as applied by this section shall have effect as if it required a prospectus to state in addition to the matters required by that section to be stated in a prospectus

(a) the net amount of the consideration received or to be received by the company in respect of the shares or debentures to which the offer relates; and

(b) the place and time at which the contract under which the said shares or debentures have been or are to be allotted may be inspected.

(4) Where a person making an offer to which this section relates is a company or a firm, it shall be sufficient if the document aforesaid is signed on behalf of the company or firm by two directors of the com. pany or not less than half of the partners, as the case may be, and any such director or partner may sign by his agent authorised in writing.

Allotment.

received.

41.-(1) No allotment shall be made of any share Prohibition capital of a company offered to the public for subs- of allotment cription unless the amount stated in the prospectus as unless the minimum amount which, in the opinion of the minimum directors, must be raised by the issue of share capital in subscription order to provide for the matters specified in paragraph 19 & 20 Geo. 5 in Part I. of the Fourth Schedule to this Ordin- 5, c. 23, ance has been subscribed, and the sum payable on 3. 39. application for the amount so stated has been paid to and received by the company.

For the purposes of this subsection, a sum shall be deemed to have been paid to and received by the com- pany if a cheque for that sum has been received in good faith by the company and the directors of the company have no reason for suspecting that the cheque will not be paid.

for "Act"

for four of the Act"

for "five of the Act"

for "Act"