Saving for Solicitors & Bankers Notice to Registrar Power to Appoint Inspector Production of Documents Entry and Search of Premises Provision for Security of Information Penalties for Documents Destruction Penalties for False Information Saving for Solicitors and Bankers Order for Inspection Ancillary Orders Disclosure or Use of Information Legal Professional Privilege Protection of Personal Data Directors of non-Private Companies Directors of Private Companies Liability for Acts of Alternates Written Record of Decision Secretary Restriction on Body Corporate Acting in Dual Capacity Qualification of Director Disposal of Company's Fixed Assets Notices of Resolutions Directors' Duty to Shareholders Provisions as to Bankrupts Validity of Acts of Directors Appointment of Directors Removal of Directors Minimum Age Limit for Directors Resignation of Director or Secretary Prohibition of Loans, etc. Excepted Transactions Consequences of Contravening 157H Criminal Penalties Register of Directors Keeping Register of Directors Duty to Make Disclosure Keeping an Index of Directors Directors with Unlimited Liability Limited Company: Special Resolution Particulars in Accounts Statements Annexed to Accounts Particulars in Accounts of Loans Further Provisions Relating to Loans General Duty to Make Disclosure Disclosure of Material Interests Management Contracts Contracts with Sole Member Payment for Loss of Office Approval of Company Requisite Director's Duty to Disclose Payment Payment of Damages in Certain Cases Supplementary Provisions Provisions as to Assignment of Office Provisions as to Liability of Officers Power to Compromise with Creditors Information as to Compromises Provisions for Reconstruction Successful Take-over Offer Alternative Remedy to Winding up Buy out by Share Repurchase Definition Application Members May Bring or Intervene Service of Written Notice Power to Strike out Proceedings Effect of Approval or Ratification General Powers of Court Protection of Personal Data Power of Court to Make Orders Discontinuance or Settlement Rules of Court Interpretation Disqualification Orders: General Conviction of Indictable Offence Persistent Breaches of Ordinance Disqualification for Fraud, etc. Disqualification of Unfit Directors Applications Under Section 168H Power to Order Public Examination Disqualification After Investigation Matters for Determining Unfitness Fraudulent Trading Criminal Penalties II Offences by Body Corporate Personal Liability for Company's Debts Application for Disqualification Order Application for Leave Under an Order Register of Disqualification Orders Regulations Transitional Modes of Winding up Liability as Contributories of Members Definition of Contributory Nature of Liability of Contributory Contributories in Case of Death Contributories in Case of Bankruptcy Jurisdiction to Wind up Companies Circumstances for Winding up Definition of Inability to Pay Debts Applications for Winding up Appearance of Official Receiver Powers of Court on Hearing Petition Hearing of Unopposed Petition Power to Stay or Restrain Avoidance of Dispositions of Property Avoidance of Attachments, &c. Commencement of Winding up Copy of Order to be Delivered Actions Stayed on Winding-up Order Effect of Winding-up Order Statement of Company's Affairs Report by Official Receiver Power to Appoint Liquidators Appointment of Provisional Liquidator Appointment, Style of Liquidators Person Other than Official Receiver General Provisions as to Liquidators Custody of Company's Property Vesting of Property of Company Powers of Liquidator Exercise of Liquidator's Powers Books to be Kept by Liquidator Payments of Liquidator into Bank Audit of Liquidator's Accounts Control of Official Receiver Release of Liquidators Meetings of Creditors&Contributories Constitution and Proceedings Powers of Court: No Committee Power to Stay Winding up Creditors' Voluntary Winding up Order under Section 209A Transitional II Settlement of List of Contributories Delivery of Property to Liquidator Debts Due by Contributory Power of Court to Make Calls Moneys Due to Company Contributory Conclusive Evidence Appointment of Special Manager Exclusion of Creditors not Proving Adjustment of Contributories Rights Inspection of Books by Creditors Power to Order Costs of Winding up Power to Summon Persons Power to Order Public Examination Jurisdiction of Registrar Power to Arrest Contributory Powers of Court Cumulative Delegation of Powers to Liquidator Dissolution of Company Otherwise Dissolution of Company: Court Order Court May Make a Regulating Order Appointment of Liquidator Compromises and Arrangements Proof of Debts Application of Ordinance Voluntary Winding up Voluntary Winding up Procedure Notice of Resolution to Wind up Commencement of Winding up Effect of Voluntary Winding up Avoidance of Transfers, &c. Certificate of Solvency Provisions Applicable to Winding up Power of Company to Appoint Power to Remove Liquidator Power to Fill Vacancy in Office Liquidator's Power to Accept Shares Duty of Liquidator to Call Creditors' Duty of Liquidator to Call Meeting Final Meeting and Dissolution Annual and Final Meetings Provisions Applicable to Creditors' Meeting of Creditors Appointment of Liquidator Appointment of Committee Fixing of Liquidators' Remuneration Power to Fill Vacancy in Office Application of Section 237 Duty of Liquidator to Call Meetings Final Meeting and Dissolution Provisions Applicable to Every Distribution of Property of Company Powers and Duties of Liquidator Appointing and Removing Liquidator Notice by Liquidator Binding on Creditors Power to Apply to Court Audit of Liquidator's Accounts Costs of Voluntary Winding up Saving for Rights of Creditors Debts of All Descriptions Application of Bankruptcy Rules Interest on Debts Extortionate Credit Transactions Preferential Payments Fraudulent Preference Fraudulently Preferred Persons Fraudulent Preference deemed to Effect of Floating Charge Disclaimer of Onerous Property Restriction of Rights of Creditor Duties of Bailiff as to Goods
Chapter: 32  COMPANIES ORDINANCE

Section Num: 157I  Version Date 13/02/2004

Civil consequences of transactions contravening section 157H

(1) A person who receives from a company a sum paid in pursuance of a transaction or arrangement entered into in contravention of section 157H shall be liable to repay that sum to the company forthwith, except where he is not a director of the company or of its holding company and he shows that, at the time the transaction or arrangement was entered into, he did not know the relevant circumstances.  (Replaced 28 of 2003 s. 63)

(2) Subject to subsection (3), a guarantee entered into or any security provided by a company in contravention of section 157H shall be unenforceable against the company.  (Amended 28 of 2003 s. 63)

(3) Subsection (2)-

(a) shall not apply to a guarantee entered into or any security provided by the company in connection with a loan or quasi-loan made by any person to, or a credit transaction entered into by any person as creditor for, a person who is not a director of the company or of its holding company if it is shown that, at the time the guarantee was entered into or the security provided, the person to whom the guarantee was given or the security provided, as the case may be, did not know the relevant circumstances; and

(b) shall not affect an interest in any property that has been passed by the company to any person by way of security provided in connection with any transaction or arrangement.  (Replaced 28 of 2003 s. 63)

(4) Without prejudice to any liability imposed on directors of companies otherwise than by this subsection, a director of a company that has entered into a transaction or arrangement in contravention of section 157H shall be liable-

(a) to account to the company for any gain that he has made directly or indirectly by the transaction or arrangement; and

(b) jointly and severally with any other director liable under this subsection, to indemnify the company for any loss or damage resulting from that transaction or arrangement,

if-

(i) he knowingly and wilfully authorized or permitted the transaction or arrangement to be entered into;

(ii) the transaction or arrangement consists of the making of a loan or quasi-loan to, or the entering into of a credit transaction as creditor for, that director or a person connected with him; or

(iii) the transaction or arrangement consists in the giving of any guarantee or the provision of any security in connection with a loan or quasi-loan made by any person to, or a credit transaction entered into by any person as creditor for, that director or a person connected with him.  (Replaced 28 of 2003 s. 63)

(5) Without prejudice to subsections (1) to (4), section 157H shall not of itself invalidate any transaction or arrangement entered into in contravention of that section.  (Replaced 28 of 2003 s. 63)

(6) In this section-

"company" has the same meaning as in section 157H(10);

"director" , except in subsection (3), includes a shadow director;

"the relevant circumstances", in relation to a contravention of section 157H, means all the facts and other circumstances constituting that contravention including, in the case of a transaction or arrangement which but for any fact or circumstance would be authorized by any provision of section 157HA, that fact or circumstance.  (Replaced 28 of 2003 s. 63)

(7) For the purposes of this section a person is connected with a director of a company if, but only if, he is-

(a) the spouse, child or step-child of that director; or

(b) a person acting in his capacity as the trustee (other than as trustee under an employees' share scheme or a  pension scheme) of any trust the beneficiaries of which include to director, his spouse or any of his children or step-children or the terms of which confer a power on the trustees the may be exercised for the benefit of the director, his spouse or any of his children or step-children; or

(c) a person acting in his capacity as partner of that director or of any person who by virtue of paragraph (a) or (b) is connected with that director; or

(d) a company in which that director or his spouse or any of his children or step-children, or any person to whom paragraph (b) or (c) applies, holds (jointly or severally or directly or indirectly) a controlling interest, and in this subsection a reference to the child or step-child of any person shall include a reference to any illegitimate child of that person, but shall not include a reference to any person who has attained the age of 18 years.  (Amended 32 of 1990 s. 13)

(Added 6 of 1984 s. 114)

[cf. 1980 c. 22 s. 52 U.K.]

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30/09/2006
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