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Companies Act, 1973 (Act No. 61 of 1973)

Chapter VI: Offering of Shares and Prospectus

Allotment and Acceptance after Offer to the Public

169. Conditional allotment if prospectus states shares to be listed by stock exchange

 

 

1) No prospectus containing a statement to the effect that application has been or will be made for permission for the shares offered thereby to be dealt in on a stock exchange shall be issued unless such an application has been made in accordance with the requirements of the stock exchange concerned on or before the date of issue of such prospectus and it names tile particular stock exchange to which such application has been made.

 

2) Any allotment of shares in pursuance of a prospectus referred to in subsection (1) shall be subject to the condition that the application for permission for the said shares to be dealt in on the stock exchange concerned, is granted or that an appeal against a refusal of such application, is upheld.

 

3)
a) Any money received in respect of applications for shares in pursuance of a prospectus referred to in subsection (1) shall be set apart by the directors of the company as a separate fund in a separate account with a banking institution registered under the Banks Act, 1965 (Act No. 23 of 1965), and shall not be available for the purposes of the company or for the satisfaction of its debts so long as the company may in terms of subsection (4) become liable for the repayment thereof.
b) If any issue of shares in pursuance of such a prospectus is oversubscribed, the directors of the company shall forthwith repay the amounts oversubscribed to the applicants.

 

4)
a) Where the application for permission to deal in the shares on a stock exchange has been refused and no appeal has been noted or when an appeal against the refusal of an application has been dismissed or an appeal against the granting of an application has been upheld, the company shall forthwith repay all moneys received in respect of applications made in pursuance of the prospectus together with any interest earned thereon, if any; and
b) if any such money is not repaid within fourteen days after the company becomes liable to repay it, the directors and officers of the company, together with the company, shall be jointly and severally liable to repay that money with interest at the rate of six per cent per annum from the expiration of the fourteenth day.

 

5)
a) If any provision of subsection (1), (3) or (4) is contravened or not complied with, the company, and every director or officer thereof who knowingly is a party to such contravention or non-compliance, shall be guilty of an offence.
b) It shall be a defence to any claim under subsection (4) (b) or any charge under paragraph (a) of this subsection to prove that the default which is the subject of the claim or the contravention or non-compliance was not due to misconduct or negligence on the part of the defendant or the accused.

 

6) The provisions of this section shall-
a) in relation to any shares agreed to be taken by a person underwriting an offer of the shares by a prospectus, have effect as if he had applied therefor in pursuance of the prospectus;
b) in the case of a prospectus offering shares for sale, be construed, except in so far as the context otherwise indicates-
i) as if any reference therein to the allotment of shares were a reference to the acceptance of the offer in respect thereof;
ii) subject to the provisions of subparagraph (iii), as if any reference therein to a company by which a prospectus has been issued, or a director or officer thereof, were a reference to the person by whom the shares have been offered; and
iii) where the person by whom the shares have been offered is a company, as if the reference therein to a director or officer of a company by which a prospectus has been issued, were a reference to a director or officer of the company by which the shares have been offered for sale.

 

7) In reckoning any number of days for the purposes of this section, Saturdays, Sundays and public holidays shall not be taken into account.

 


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