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Companies Act, 2008 (Act No. 71 of 2008)

Chapter 4 : Public Offerings of Company Securities

109. Voidable allotment


(1) If an allotment made by a company to an applicant, or the acceptance of an offer made by an applicant, is in contravention of section 108(2), and the relevant offer was not subsequently subscribed to the minimum extent contemplated in that section—
(a) that allotment is voidable at the instance of the applicant concerned, irrespective of whether the company concerned may be in the course of being wound up; and
(b) every director of the company concerned and if the offeror is a company, every director of that company, is liable to the extent set out in section 77(3)(e)(vii), if the allotment or acceptance is declared void under paragraph (a).


(2) Proceedings to recover any loss, damages or costs contemplated in this section may not be commenced after the earlier of—
(a) 20 business days after the applicant discovers the contravention; or
(b) three years after the date of the relevant allotment or acceptance.