1964_COMPANIES_ORDINANCE — Page 59

1984 Ed.]

Companies

[CAP. 32

169

(7) The exception specified in subsection (3)(c), (d) or (e) does not authorize a company to enter into a transaction if at the time that the transaction is entered into the aggregate of the following amounts—

(a) the amount outstanding at that time on all loans made by the company to any of its directors otherwise than under subsection (3)(a) or (h);

(b) the amount representing the maximum liability of the company at that time under all guarantees entered into, and in respect of any security provided, by the company in connexion with loans made by any person to any of its directors; and

(c) if the transaction in question is

(i) a loan, the amount of such loan;

(ii) a guarantee, the amount representing the maximum liability of the company under such guarantee; or

(iii) the provision of a security, the amount representing the maximum liability of the company in respect of such security,

exceeds 5 per cent of the amount of the company's net assets as shown in the latest balance sheet laid before the company in general meeting.

(8) The exception specified in subsection (3)(e) does not authorize a company to make a loan to any director of the company or of its holding company or, where any one or more of the directors of the company hold (jointly or severally or directly or indirectly) a controlling interest in another company, to that other company, or to enter into a guarantee in connexion with a loan made by any person to any such director or other company, if at the time that the loan is made or, as the case may be, that guarantee is given the aggregate of the following amounts exceeds $500,000—

(a) the principal of the loan to be made or guaranteed by the company or, if the case so requires, so much of that principal as is so guaranteed;

(b) any amount outstanding at that time by way of principal on any other loan made by the company by virtue of that exception to such director or other company; and

(c) where at that time the company is or may be made liable in pursuance of any guarantee entered into by virtue of that exception, the amount for which the company is or may be so made liable in respect of the principal of any other loan to such director or other company.

(9) In the application of this section to—

(a) a company in the case of which shares are listed on a recognized stock exchange;