1964_COMPANIES_ORDINANCE — Page 322

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Power of company to pay interest out of capital in certain cases.

1929 c. 23, s. 54.

Non voting shares and shares with different voting rights.

CAP. 32]

Companies (1984 Ed.

57. Where any shares of a company are issued for the purpose of raising money to defray the expenses of the construction of any works or buildings or the provision of any plant which cannot be made profitable for a lengthened period, the company may pay interest on so much of that share capital as is for the time being paid up for the period and subject to the conditions and restrictions in this section mentioned, and may charge the sum so paid by way of interest to capital as part of the cost of construction of the work or building, or the provision of plant:

Provided that—

(a) no such payment shall be made unless it is authorized by the articles or by special resolution;

(b) no such payment, whether authorized by the articles or by special resolution, shall be made without the previous sanction of the court;

(c) before sanctioning any such payment the court may, at the expense of the company, appoint a person to inquire and report to them as to the circumstances of the case, and may, before making the appointment, require the company to give security for the payment of the costs of the inquiry;

(d) the payment shall be made only for such period as may be determined by the court, and that period shall in no case extend beyond the close of the half year next after the half year during which the works or buildings have been actually completed or the plant provided;

(e) the rate of interest shall in no case exceed 8 per cent per annum, (Replaced, 6 of 1984, s. 26)

(f) the payment of the interest shall not operate as a reduction of the amount paid up on the shares in respect of which it is paid.

(Amended, 80 of 1974, s. 9)

57A. (1) In the case of a company the share capital of which is divided into different classes of shares and includes a class of shares (other than preference or preferred shares so described) the holders of which are not entitled to vote at general meetings of the company, the descriptive title of the shares of that class shall include the words "non voting" and those words shall appear legibly on any share certificate, prospectus or directors' report issued by the company.

(2) In the case of a company the share capital of which is divided into different classes of shares, every share certificate issued by the company shall contain in a prominent position a statement that its share capital is divided into different classes of shares; and such statement shall specify in respect of the shares of each class the nominal value thereof and the voting rights attached thereto.

(3) If default is made in complying with subsection (1) or (2), the company and every officer of the company who is in default shall be liable to a default-fine.