Companies Act, 1973 (Act No. 61 of 1973)Chapter XII: Compromise, Amalgamation, Arrangement and Take-overs312. Information as to compromises and arrangements |
| 1) | Where a meeting of creditors or any class of creditors or of members or any class of members is summoned under section 311 for the purpose of agreeing to a compromise or arrangement, there shall-- |
| a) | with every notice summoning the meeting which is sent to a creditor or member, be sent also a statement-- |
| i) | explaining the effect of the compromise or arrangement; |
| ii) | stating all relevant information material to the value of the shares and debentures concerned in any arrangement; and |
| iii) | in particular stating any material interests of the directors of the company, whether as directors or as members or as creditors of the company or otherwise, and the effect thereon of the compromise or arrangement, in so far as it is different from the effect on the like interests of other persons; and |
| b) | in every notice summoning the meeting which is given by advertisement, be included either such a statement as aforesaid or a notification of the place at which and the manner in which creditors or members entitled to attend the meeting may obtain copies of such a statement. |
| 2) | Where the compromise or arrangement affects the rights of debenture-holders of the company, the said statement shall give the like explanation and statement as respects the trustee of any deed for securing the issue of the debentures as it is required to give as respects the company's directors. |
| 3) | Where a notice given by advertisement includes a notification that copies of the said statement can be obtained by creditors or members entitled to attend the meeting, every such creditor or member shall, on making application in the manner indicated by the notice, be furnished by the company free of charge with a copy of the statement. |
| 4) | Where a company makes default in complying with any requirement of this section, the company and every director or officer of the company who is a party to the default, shall be guilty of an offence, and for the purpose of this subsection any liquidator of the company and any trustee of a deed for securing the issue of debentures of the company shall be deemed to be an officer of the company: Provided that a person shall not be liable under this subsection if he shows that the default was due to the refusal of any other person, being a director or trustee for debenture-holders, to supply the necessary particulars as to his interests and that fact has been stated in the statement. |
| 5) | It shall be the duty of every director of a company and of every trustee for debenture-holders to give notice to the company of such matters relating to himself as may be necessary for the purposes of this section, and if he makes default in complying with such duty, he shall be guilty of an offence. |