Companies Act, 1973 (Act No. 61 of 1973)Chapter IX: Remedies of MembersInquiry into Membership and Ownership of Shares and Control of Company256. Power to impose restrictions on shares or debentures |
| 1) |
| a) | Where in connection with an investigation under section 254 or 255 it appears to the Minister that there is difficulty in finding out the relevant facts about any shares of a company (whether issued or to be issued), and that the difficulty is due wholly or mainly to the unwillingness of the persons concerned or any of them to assist in the investigation, the Minister may by notice published in the Gazette and served by post upon the company at its registered office declare that the shares shall as from the date of publication of the notice in the Gazette be subject to the restrictions imposed by this section. |
| b) | The Minister may in like manner withdraw or amend such notice. |
| 2) | As long as any such notice is in force- |
| a) | any transfer of the shares to which it relates or, in the case of unissued shares, any transfer of the right to be issued therewith or any issue thereof, shall be void; |
| b) | no voting rights shall be exercisable in respect of such shares; |
| c) | no further shares shall be issued in pursuance of any right attached to such shares or in pursuance of any offer made to the holder thereof; and |
| d) | except in a winding-up, no payment shall be made of any sums due from the company in respect of such shares, whether in respect of capital or otherwise. |
| 3) | Where the Minister has by any such notice declared that shares shall be subject to the said restrictions, or refuses to withdraw or amend any such notice, any person aggrieved thereby may apply to the Court, and the Court may, if it sees fit, direct that the shares shall cease to be subject to the said restrictions or to any one or more of them. |
| 4) | Any notice of the Minister or order of the Court directing that shares shall cease to be subject to any of the restrictions referred to in subsection (2), which is expressed to be made with a view to permitting a transfer of those shares, may continue the restrictions referred to in paragraphs (c) and (d) of that subsection, either in whole or in part, in so far as they relate to any right acquired or offer made before the transfer. |
| 5) | Any person who- |
| a) | exercises or purports to exercise any right to dispose of any shares which to his knowledge are subject to the restrictions mentioned in subsection (2) or of any right to be issued with any such shares; or |
| b) | votes in respect of any such shares, whether as holder or proxy, or appoints a proxy to vote in respect thereof; or |
| c) | being the holder of any such shares, fails to give notice of their being subject to the said restrictions to any person whom he does not know to be aware of that fact, but does know to be entitled, apart from the said restrictions, to vote in respect of those shares, whether as holder or proxy, shall be guilty of an offence. |
| 6) | Where shares of any company are issued in contravention of the said restrictions, the company, and every director or office who knowingly takes part in the contravention, shall be guilty of an offence. |
| 7) | This section shall apply in relation to debentures as it applies in relation to shares. |