193704-1932-Supplementary-Bill-read-a-second-time--Companies — Page 13

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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of the company, or as having agreed to become a director thereof, and he has not consented to become a director, or has withdrawn his consent before the issue of the prospectus, and has not authorised or consented to the issue thereof, the directors of the company, except any without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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