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COMPANIES (ACQUISITION OF SHARES) ACT 1980 No. 64 of 1980 - SECT 44
Liability for mis-statements
PART VI-MISCELLANEOUS
44. (1) Where-
(a) there is, in a statement that purports to be a Part A statement served
under paragraph 16 (2) (d), in a take-over offer or in a notice given
under sub-section 42 (2) or sub-section 43 (1) or (4), matter that is
false in a material particular or materially misleading in the form or
context in which it appears; or
(b) there is an omission of material matter from such a statement, offer
or notice, a person to whom this sub-section applies is, subject to
this section, guilty of an offence.
(2) Where-
(a) there is, in a statement that purports to be a Part B statement given
under sub-section 22 (1) or a Part D statement served under sub-
section 32 (1), matter that is false in a material particular or
materially misleading in the form or context in which it appears; or
(b) there is an omission of material matter from such a statement, a
person to whom this sub-section applies is, subject to this section,
guilty of an offence.
(3) Where-
(a) there is, in a statement that purports to be a Part C statement served
under paragraph 17 (10) (a), or in a notice given under sub-section 42
(3) or sub-section 43 (1) or (4), matter that is false in a material
particular or materially misleading in the form or context in which it
appears; or
(b) there is an omission of material matter from such a statement or
notice, a person to whom this sub-section applies is, subject to this
section, guilty of an offence.
(4) Where-
(a) there is-
(i) in a report that is set out in a Part B statement in accordance
with paragraph 22 (3) (a) or accompanies a Part B statement in
accordance with section 23;
(ii) in a report that is set out in a Part D statement in accordance
with paragraph 32 (3) (a);
(iii) in a report that accompanies, or is included in, a statement
issued with the consent of the Commission under section 37 or
38; or
(iv) in a report that accompanies a notice given under sub-section
43 (4), matter that is false in a material particular or
materially misleading in the form or context in which it
appears; or
(b) there is an omission of material matter from such a report, the person
who made the report and, if that person is a corporation, any officer
of the corporation who is in default are, subject to this section,
each guilty of an offence.
(5) Where-
(a) a person proposes, or 2 or more persons together propose, to dispatch
a take-over offer or to cause a take-over offer to be dispatched, or
to cause a take-over announcement to be made, in respect of shares in
a company;
(b) the person, or either or any of the persons, referred to in paragraph
(a), or a person associated with the person or with either or any of
the persons, or, if the person or either or any of the persons or any
person associated with the person or with either or any of the persons
is a corporation, an officer of the corporation or a person associated
with such an officer-
(i) makes or issues, or causes to be made or issued, an oral or
written statement to the public, or publishes, or causes to be
published, an advertisement, relating to a prescribed matter;
or
(ii) dispatches, or causes to be dispatched, a document relating to
a prescribed matter to any of the holders of shares in, or of
renounceable options or convertible notes granted or issued by,
the target company; and
(c) there is in the statement or advertisement, or in the document, matter
that is false in a material particular or materially misleading in the
form or context in which it appears, the person who made or issued the
statement, published the advertisement or dispatched the document, or
caused the statement to be made or issued, the advertisement to be
published or the document to be dispatched, and, if that person is a
corporation, any officer of the corporation who is in default, are,
subject to this section, each guilty of an offence.
(6) Where-
(a) the directors of a company have reason to believe that a person
proposes, or 2 or more persons together propose, to dispatch a
take-over offer or to cause a take-over offer to be dispatched, or to
cause a take- over announcement to be made, in respect of shares in
the company;
(b) the target company or a corporation that is related to the target pany
or an officer of the target company or of such a corporation or a
person associated with such an officer-
(i) makes or issues, or causes to be made or issued, an oral or
written statement to the public, or publishes, or causes to be
published, an advertisement, relating to a prescribed matter;
or
(ii) dispatches, or causes to be dispatched, a document relating to
a prescribed matter to any of the holders of shares in, or of
renounceable options or convertible notes granted or issued by,
the target company; and
(c) there is in the statement or advertisement, or in the document, matter
that is false in a material particular or materially misleading in the
form or context in which it appears, the person who made or issued the
statement, published the advertisement or dispatched the document, or
caused the statement to be made or issued, the advertisement to be
published or the document to be dispatched, and, if that person is a
corporation, any officer of the corporation who is in default, are,
subject to this section, each guilty of an offence.
(7) Where-
(a) a take-over offer is dispatched, or a take-over announcement is made,
in respect of shares in a company;
(b) at any time during the period commencing when the take-over offer is
dispatched or the take-over announcement is made and ending at the
expiration of the period during which the take-over offer remains open
or the offers constituted by the take-over announcement remain open, a
person to whom this section applies-
(i) makes or issues, or causes to be made or issued, an oral or
written statement to the public, or publishes, or causes to be
published, an advertisement, in connection with the offers
under the relevant take-over scheme or in connection with the
take- over announcement, relating to a prescribed matter; or
(ii) dispatches, or causes to be dispatched, in connection with the
offers under the relevant take-over scheme or in connection
with the take-over announcement, a document relating to a
prescribed matter to any of the holders of shares in, or of
renounceable options or convertible notes granted or issued by,
the target company (not being a document required by this Act
to be so dispatched); and
(c) there is in the statement or advertisement, or in the document, matter
that is false in a material particular or materially misleading in the
form or context in which it appears, that person, and, if that person
is a corporation, any officer of the corporation who is in default,
are, subject to this section, each guilty of an offence.
(8) For the purposes of sub-sections (5), (6) and (7)-
(a) a reference to a document includes a reference to a disc, tape,
cinema- cinematograph film or other article from which sounds or
images can be reproduced; and
(b) a prescribed matter is a matter relating to affairs of, or to
marketable securities issued or to be issued by-
(i) the target company or a corporation that is related to the
target company;
(ii) the offeror or on-market offeror, as the case may be, or a
corporation that is related to the offeror or
on-market offeror; or
(iii) any other offeror or on-market offeror in relation to the
target company, or any corporation that is related to such an
offeror or on-market offeror.
(9) A person to whom sub-section (1), (2) or (3) applies, or a person referred
to in sub-section (4), is, in the circumstances referred to in that
sub-section, whether or not he has been convicted of an offence under that
sub- section, liable, subject to this section, to pay compensation to a person
who acts, or refrains from acting, on the faith of the contents of the
relevant state- ment, offer, notice or report for any loss or damage sustained
by that person by reason of his reliance on the false or misleading matter or
by reason of the omission of material matter.
(10) A person referred to in sub-section (5), (6) or (7) is, in the
circumstances referred to in that sub-section, whether or not he has been
convicted of an offence under that sub-section, liable, subject to this
section, to pay compensation to a person who acts, or refrains from acting, on
the faith of the contents of the relevant statement, advertisement or document
for any loss or damage sustained by that person by reason of his reliance on
the false or misleading matter.
(11) The persons to whom sub-section (1) applies are-
(a) the offeror;
(b) in a case where false or misleading matter appeared in, or material
matter was omitted from, a statement-
(i) if the offeror is or includes a corporation-a person who was a
director of that corporation at the time when the statement was
served, not being-
(A) a director who was not present at the meeting at which
the resolution authorizing the signing of the statement
was agreed to; or
(B) a director who voted against that resolution; and
(ii) subject to sub-section (15), a person a notice of whose consent
to the inclusion in the statement of a report made by him has
been lodged with the Commission under paragraph 18 (2) (b); and
(c) in a case where-
(i) false or misleading matter appeared in, or material matter was
omitted from, an offer or notice; and
(ii) the offeror is or includes a corporation, a person who was a
director of that corporation at the time when the offer was
dispatched or the notice was given, as the case may be.
(12) The persons to whom sub-section (2) applies are-
(a) the target company;
(b) where the statement was signed as mentioned in paragraph 22 (2) (a) or
32 (2) (a)-a person who was director of the target company at the time
when the statement was given or served, not being-
(i) a director who was not present at the meeting at which the
resolution authorizing the signing of the statement was agreed
to; or
(ii) a director who voted against that resolution; and
(c) where the statement was signed as mentioned in paragraph 22 (2) (b) or
32 (2) (b)-the person who signed the statement.
(13) The persons to whom sub-section (3) applies are-
(a) the on-market offeror; and
(b) in a case where-
(i) false or misleading matter appeared in, or material matter was
omitted from, a statement; and
(ii) the on-market offeror is or includes a corporation, a person
who was a director of that corporation at the time when the
statement was served, not being-
(iii) a director who was not present at the meeting at which the
resolution authorizing the signing of the statement was agreed
to; or
(iv) a director who voted against that resolution.
(14) The persons to whom sub-section (7) applies are-
(a) the offeror or on-market offeror;
(b) a person associated with a person referred to in paragraph (a);
(c) the target company;
(d) an officer of the target company or a person associated with such an
officer; or
(e) if a person referred to in paragraph (a) or (b) is a corporation-an
officer of the corporation or a person associated with such an
officer.
(15) A person referred to in sub-paragraph (11) (b) (ii) is guilty of an
offence under sub-section (1), and liable to pay compensation under
sub-section (9), only in respect of false or misleading matter in the report
referred to in that sub-paragraph or an omission of material matter from that
report.
(16) It is a defence to a prosecution of a person for an offence against
sub-section (1), (2), (3) or (4) if the person proves-
(a) that, when the statement was served or given, the offer was
dispatched, the notice was given or the report was made, he-
(i) believed on reasonable grounds that the false matter was true;
(ii) believed on reasonable grounds that the misleading matter was
not misleading;
(iii) in the case of an omission, believed on reasonable grounds that
no material matter had been omitted; or
(iv) in the case of an omission, did not know that the omitted
matter was material; and
(b) that-
(i) on the date of the information, he so believed or did not so
know; or
(ii) before that date, he ceased so to believe or came to know that
the omitted matter was material, and forthwith gave reasonable
notice containing such matters as were necessary to correct the
false or misleading matter or the omission.
(17) It is a defence to a prosecution of a person for an offence against sub-
section (5), (6) or (7) if the person proves-
(a) that, when the statement was made or issued, the advertisement was
published or the document was dispatched, he-
(i) believed on reasonable grounds that the false matter was true;
or
(ii) believed on reasonable grounds that the misleading matter was
not misleading; and
(b) that-
(i) on the date of the information, he so believed; or
(ii) before that date, he ceased so to believe and forthwith gave
reasonable notice containing such matters as were necessary to
correct the false or misleading matter.
(18) It is a defence to an action under sub-section (9) if the defendant
proves-
(a) any matter referred to in paragraph (16) (a); and
(b) in a case where the action is brought by a person who acted on the
faith of the contents of the relevant statement, offer, notice or
report, that-
(i) when the plaintiff so acted, the defendant believed as
mentioned in sub-paragraph (16) (a) (i), (ii) or (iii) or did
not know that the omitted matter was material; or
(ii) before the plaintiff so acted, the defendant ceased so to
believe or came to know that the omitted matter was material,
and forthwith gave reasonable notice containing such matters as
were necessary to correct the false or misleading matter or the
omission.
(19) It is a defence to an action under sub-section (10) if the defendant
proves-
(a) any matter referred to in paragraph (17) (a); and
(b) in a case where the action is brought by a person who acted on the
faith of the contents of the relevant statement, advertisement or
document, that-
(i) when the plaintiff so acted, the defendant believed as
mentioned in sub-paragraph (17) (a) (i) or (ii); or
(ii) before the plaintiff so acted, the defendant ceased so to
believe and forthwith gave reasonable notice containing such
matters as were necessary to correct the false or misleading
matter.
(20) The penalty for an offence arising under this section is a fine not
exceeding $5,000 or imprisonment for a period not exceeding 1 year, or both.
(21) Nothing in this section affects any cause of action existing apart from
this section.
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