193704-1932-Supplementary-Bill-read-a-second-time--Companies — Page 12

Restriction

of terms mentioned

1538

a director or other person responsible for the prospectus shall not incur any liability by reason of the non- compliance or contravention, if---

(a) as regards any matter not disclosed, he proves

that he was not cognisant thereof; or

(b) he proves that the non-compliance or con- travention arose from an honest mistake of fact on his part; or

(c) the non-compliance or contravention was in respect of matters which in the opinion of the court dealing with the case were immaterial or was otherwise such as ought, in the opinion of that court, having regard to all the cir- cumstances of the case, reasonably to be excused:

Provided that, in the event of failure to include in a prospectus a statement with respect to the matters specified in paragraph 15 of Part I of the Fourth Schedule to this Ordinance, no director or other person shall incur any liability in respect of the failure unless it be proved that he had knowledge of the matters not disclosed.

(5) This section shall not apply to the issue to existing members or debenture holders of a company of a prospectus or form of application relating to shares in or debentures of the company, whether an applicant for shares or debentures will or will not have the right to renounce in favour of other persons, but, subject as aforesaid, this section shall apply to a prospectus or a form of application whether issued on or with reference to the formation of a company or sub- sequently.

(6) Nothing in this section shall limit or diminish any liability which any person may incur under the general law or this Ordinance apart from this section.

38.-(1) A company limited by shares or a company on alteration limited by guarantee and having a share capital shall not previously to the statutory meeting vary the terms of a contract referred to in the prospectus, or state- ment in lieu of prospectus, except subject to the approval of the statutory meeting.

in prospectus or statement

in lieu of prospectus. 19 & 20 Geo. 5, c. 23, 9. 36.

Liability for

statements

in pros- pectus.

19 & 20 Geo. 5, c. 23,

s. 37.

(2) This section shall not apply to a private com-

pany.

39.-(1) Where a prospectus invites persons to subscribe for shares in or debentures of a company- (a) every person who is a director of the company at the time of the issue of the prospectus; and (b) every person who has authorised himself to be named and is named in the prospectus as a director or as having agreed to become a direc- tor either immediately or after an interval of time; and

(c) every person being a promoter of the com-

pany; and

(d) 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-

(i) that having consented to become a director of the company he withdrew his consent before the issue of the prospectus, and that it was issued without his authority or consent; or (ii) that the prospectus was issued without his knowledge 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