Section 258 - Information on arrangements and compromises,mergers or divisions

(1) Where notice of a resolution to approve an arrangement or compromise under section 239 or any other provision relating to arrangements, compromises, mergers or divisions is sent to members or creditors of a company, there shall be sent also a statement explaining the effect

(a) of the arrangement or compromise and in particular stating the material interests of the directors of the company, whether as directors or members or creditors of the company or otherwise, and

(b) on those interests of the arrangement or compromise in so far as it is different from the effect on the like interests of other persons.

(2) In a notice of the resolution which is given by advertisement, there shall be included the statement referred to in subsection (1) or a notification of the place at which, and the manner in which members or creditors to whom the notice is addressed may obtain copies of the statement.

(3) The member or creditor shall, on making an application in the manner indicated in the notice, be furnished by the company, free of charge, with a copy of the statement.

(4) Where the arrangement or compromise affects the rights of debenture holders of the company, the statement shall give the like explanation to the trustees of a deed for securing the debentures as it is required to be given to the directors of the company.

(5) Where a company defaults in complying with a requirement of this section, the company and each officer of the company that is in default is liable to pay to the Registrar, an administrative penalty of seven hundred and fifty penalty units.

(6) For the purposes of subsection (5)

(a) a liquidator of the company or a trustee of a deed securing debentures of the company is an officer of the company;

(b) a person is not liable under that subsection if that person shows that the default was due to the refusal of any other person to supply the necessary particulars as to those material interests; and

(c) that subsection does not derogate from the power of the Court under section 218 or 219 to declare ineffective a special resolution passed pursuant to section 238.

(7) A director of the company and of a trustee for debenture holders of the company, shall give notice to the company of the matters relating to that director or trustee as may be necessary for the purposes of this section, and a director or trustee who defaults in complying with this subsection is liable to pay to the Registrar, an administrative penalty of one hundred and fifty penalty units.